Fiscal Dominance, Political Rhetoric, and Investment Strategy in an Era of “Run-It-Hot” Economics: A Deep Dive with Lyn Alden

Introduction: The Fiscal vs. Monetary Paradigm Shift

The global macroeconomic landscape is undergoing a profound transformation, with traditional frameworks of central bank-led monetary policy giving way to a new era dominated by fiscal policy. Few analysts have been as consistently ahead of this shift as Lyn Alden, founder of Lyn Alden Investment Strategy. In a wide-ranging interview, Alden discusses the implications of fiscal dominance, the challenges of managing deficits, the influence of politics on economic outcomes, and the investment strategies she believes are best suited for this emerging paradigm.

Alden argues convincingly that we’ve entered a structural phase where fiscal policy—not monetary policy—is the dominant force shaping economic outcomes. While interest rate adjustments by central banks still matter, they’re increasingly powerless in a world where federal government borrowing dwarfs that of the private sector. As Alden puts it, “There’s really kind of no good answers if you’re trying to run a central bank when an economy has over 100% debt-to-GDP and structurally large deficits.”

Why Fiscal Dominance Matters More Than Ever

For decades, monetary policy was the cornerstone of economic management. Central banks raised or lowered interest rates to control inflation, spur growth, or rein in overheating economies. But those

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