The news has been abuzz recently with speculation about the Federal Reserve Chairman Kevin Warsh’s next move on interest rates. Treasury Secretary Scott Bessent made headlines with his recent, unsuccessful effort to calm bond markets after another bout of turbulence. It’s worth stepping back to see the forest for the trees, as we say, and paying attention to the warning signs that may seem small or distant now but can get expensive fast. It’s as Heminway wrote about bankruptcy in The Sun Also Rises, it happened two ways: “gradually and then suddenly.”

The bigger issue isn’t where interest rates or Treasury yields move next week. It’s the growing uncertainty surrounding something the United States has long been able to take for granted.

The federal government has enjoyed an extraordinary financial advantage for decades. Governments, banks, businesses, and investors around the world want dollars, and they want U.S. Treasury securities. The world is denominated in dollars. That helps Washington finance its debt more cheaply than it otherwise could.

Putting that advantage at risk would be costly at any time, but it is particularly dangerous now. For years, historically low interest rates allowed the federal government to pile on debt without immediately feeling the full cost. Rates were pushed to near zero during the COVID pandemic, making an already favorable borrowing environment even cheaper.

That era is over. Interest rates are now well above their averages over the past decade, just as Washington has accumulated far more debt to finance. And as low interest bonds are retired they are being refinanced at a higher rate. All of this makes preserving the advantages we still have all the more important.

For now, the dollar remains the world’s dominant currency. Oil is bought and sold in dollars. The greenback is used in nearly 90 percent of global foreign exchange transactions, and roughly 60 percent of central bank foreign currency reserves are held in dollar-denominated assets. U.S. Treasury securities sit at the center of the global financial system. Economists sometimes call this America’s “exorbitant privilege.” We might put it another way. To borrow from Spider-Man, with great financial power comes great fiscal responsibility.

The advantages the United States enjoys were built on confidence over generations. Investors trust that Treasury securities will be paid. They trust that U.S. financial markets will remain deep and liquid. They trust the Federal Reserve to manage monetary policy rather than serve the political needs of whichever party occupies the White House. Those assumptions have enormous financial value.

Which brings us to the chaos.

Congress has spent years testing investors’ patience. Repeated debt-limit confrontations have raised the possibility, however remote, that the United States could fail to pay obligations it has already incurred. Huge structural deficits mean Treasury must continually issue enormous amounts of new debt. Now, erratic tariff policies have made billions of dollars in projected revenue less reliable while sowing uncertainty for businesses, investors, and budget planners alike. Political pressure on the Federal Reserve gives global investors another reason to question whether monetary policy will remain independent of presidential politics.

Are we making investors more or less confident about lending enormous amounts of money to the United States? The consequences of getting that answer wrong are terrifying. The dollar does not have to lose its dominant position for taxpayers to pay a price. Investors only have to decide that lending to the United States carries a little more risk and demand slightly higher yields. When you’re borrowing on the scale the United States is borrowing, even small changes can add billions to taxpayers’ interest bill. Lest we forget, money spent servicing the debt is money that cannot be spent on national defense, infrastructure, disaster preparedness, or anything else taxpayers expect their government to provide.

That is why America’s fiscal credibility is an asset worth protecting.

Congress and the administration cannot control global markets. They can control whether they repeatedly threaten default, whether fiscal policy puts the debt on an increasingly unsustainable trajectory, whether erratic tariff policies make federal revenue less reliable and inject uncertainty into the economy, and whether political leaders undermine confidence in the institutions that have helped make dollar assets attractive in the first place.

For generations, the United States has benefited from the world’s willingness to hold our currency and finance our debt on exceptionally favorable terms. That privilege should not be mistaken for a birthright. With great financial power comes great fiscal responsibility. Because eventually, chaos has a cost.