‘The demographic dividend of the last 40 years is ending’: J.P. Morgan says the world is running out of the two things that kept interest rates down - Fortune

What the report says

Fortune reported that J.P. Morgan economists led by Joyce Chang are warning that two long-running supports for low borrowing costs — favorable demographics and fiscal restraint — are weakening. In a note published this week, the bank’s team said the global economy is being shaped by six forces it described as deficits, deregulation, decarbonization, depopulation, deglobalization and dedollarization, with deficits and shrinking populations seen as especially likely to push interest rates higher.

According to Fortune, the J.P. Morgan note pointed to heavy public borrowing and reduced “fiscal space” as governments face higher debt-servicing costs and competing spending demands. The article cited an IMF figure that global debt held by companies, households and governments reached $251 trillion in 2025, while J.P. Morgan said global public debt was around $100 trillion. The bank argued that elevated deficits may increase the extra return investors demand to hold longer-term bonds, including in the United States, where it saw limited near-term political appetite for fiscal consolidation.

The demographic concern centers on aging societies and lower birth rates in advanced economies. Fortune reported that J.P. Morgan expects smaller workforces and larger retired populations to increase pressure on pension and health systems while governments also fund priorities such as defense, infrastructure and renewable energy. The bank warned that, without offsetting tax increases, spending cuts or stronger growth dynamics, debt burdens could rise further after 2031.

The report matters because interest rates affect mortgages, business investment, government budgets and financial markets. Fortune’s account frames J.P. Morgan’s view as a broad macroeconomic warning: the demographic conditions that helped lift savings and restrain rates over recent decades may be fading, while public finances are becoming more strained.