Could the US lose its exorbitant privilege?

October 2025

For nearly eight decades the United States has enjoyed what Valéry Giscard d’Estaing once called an “exorbitant privilege”: the ability to finance persistent external and fiscal deficits in its own currency at unusually favorable interest rates.

That privilege derives from the dollar’s unrivalled role as the pre-eminent global reserve asset, invoicing unit, and settlement medium for cross-border finance. Yet a confluence of geopolitical tension, domestic policy drift, and technological change potentially threatens to erode that primacy.