The Spillover

In this episode, The Spillover’s Sebastian Mallaby is hosted by Dan Kurtz-Phelan, editor of Foreign Affairs, to discuss the “AI trilemma”—the challenge U.S. policymakers face in encouraging enough innovation to stay ahead of China while addressing public anxiety about AI. Drawing on Mallaby’s recent Foreign Affairs essay and his new book, The Infinity Machine, this episode explores the stakes of the AI race and how its trajectory will reshape economies, societies, and global politics.
 
Host:
 
Dan Kurtz-Phelan, Editor, Foreign Affairs
 
Guest:
 
Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics, Council on Foreign Relations (CFR)
 
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The Spillover is a production of the Council on Foreign Relations. The opinions expressed on the show are solely those of the hosts and guests, not of the Council, which takes no institutional positions on matters of policy.

Rebecca Patterson and Sebastian Mallaby are joined by Rahm Emanuel, who served as President Bill Clinton’s political strategist, President Barack Obama’s first White House chief of staff, and President Joe Biden’s U.S. ambassador to Japan. The trio discuss Emanuel’s recent speech in Israel, the state of the U.S. Democratic Party, and the outlook for the upcoming midterm elections.
 
Hosts:
 
Rebecca Patterson, Senior Fellow, Council on Foreign Relations (CFR)
 
Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics, Council on Foreign Relations (CFR)
 
Guest:
 
Rahm Emanuel, Former U.S. Ambassador to Japan (2022–2025), Former Mayor of Chicago (2011–2019), Former White House Chief of Staff (2009–2010)
 
Mentioned on the Episode:
 
Emma Graham-Harrison, “Israeli Former Leaders and Security Chiefs Threaten Legal Action Over ‘Jewish Terrorism’,” The Guardian
 
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The Spillover is a production of the Council on Foreign Relations. The opinions expressed on the show are solely those of the hosts and guests, not of the Council, which takes no institutional positions on matters of policy.

On this episode of The Spillover, Rebecca Patterson and Sebastian Mallaby, joined by CFR expert Jonathan Hillman, examine the U.S. government's rapidly growing portfolio of equity stakes in private companies, including a potential stake in OpenAI.
Hosts:
 
Rebecca Patterson, Senior Fellow, Council on Foreign Relations (CFR)
 
Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics, Council on Foreign Relations (CFR)
 
Guest:
 
Jonathan E. Hillman, Senior Fellow for Geoeconomics, Council on Foreign Relations (CFR)
 
Mentioned on the Episode:
 
Jonathan E. Hillman, “Washington’s Growing Portfolio: Tracking U.S. Government Investments,” CFR.org
 
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The Spillover is a production of the Council on Foreign Relations. The opinions expressed on the show are solely those of the hosts and guests, not of the Council, which takes no institutional positions on matters of policy.

Cohosts Rebecca Patterson and Sebastian Mallaby stage a friendly debate over two so-called dollar alternatives—gold and bitcoin—weighing whether either has truly earned its reputation as a store of value. Patterson defends gold’s centuries of institutional credibility and diversification track record, while Mallaby makes the bull case for bitcoin’s finite supply and upside potential.
 
Hosts:
 
Rebecca Patterson, Senior Fellow, Council on Foreign Relations (CFR)
 
Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics, Council on Foreign Relations (CFR)
 
Mentioned on the Episode:
 
SPDR Gold Shares (GLD): The largest and most highly traded physical gold ETF, holding bullion in secure London vaults. It carries an expense ratio of 0.40 percent. This is just for information; it is not a trading recommendation.
 
Rebecca Patterson, “Gold as an Equity Hedge Requires Patience,” Financial Times
 
“CLARITY Act Countdown: Crypto Bill Misses July 4 Target, August 7 Deadline Looms,” Yahoo Finance
 
“Central Bank Gold Reserves Survey 2026,” World Gold Council
 
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The Spillover is a production of the Council on Foreign Relations. The opinions expressed on the show are solely those of the hosts and guests, not of the Council, which takes no institutional positions on matters of policy.

America’s 250th birthday is the talk of the nation. But the more important story might be what the milestone reveals about the fragile bargain between democracy and markets, and whether the republic can survive its own cultural divisions.
 
Host:
 
Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics, Council on Foreign Relations (CFR)
 
Guest:
 
Martin Wolf, Chief Economics Commentator, Financial Times
 
Mentioned on the Episode: 
 
Martin Wolf, The Crisis of Democratic Capitalism: A Diagnosis of Decline and Prescription for Repair 
 
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The Spillover is a production of the Council on Foreign Relations. The opinions expressed on the show are solely those of the hosts and guests, not of the Council, which takes no institutional positions on matters of policy.

In this episode of The Spillover, host Rebecca Patterson and former Federal Reserve Vice Chair Roger W. Ferguson Jr. reflect on the legacy of recently deceased former Fed Chair Alan Greenspan, and examine what may lie ahead for the Fed under its new chair Kevin Warsh.
 
Hosts:
 
Rebecca Patterson, Senior Fellow, Council on Foreign Relations (CFR)
 
Guest:
 
Roger W. Ferguson Jr., Steven A. Tananbaum Distinguished Fellow for International Economics, Council on Foreign Relations (CFR); Former Federal Reserve Vice Chairman (1999–2006)
 
Description:
 
On this episode of The Spillover, cohost Rebecca Patterson speaks with CFR Distinguished Fellow for International Economics Roger Ferguson about Kevin Warsh's first FOMC meeting as Chair of the Federal Reserve, which played out largely as predicted.
 
To bring in fresh perspectives, Warsh has created five task forces. They cover communication, the inflation mandate, productivity and jobs, data collection, and a balance sheet framework. Well-led task forces have historically moved the Fed forward, but progress will likely be uneven and slower than hoped. As Roger Ferguson notes, “This is the kind of thing where you want to measure twice, cut once. Once you make the change, you're gonna have to live with it for a period of time.”
 
Current conditions point to a rate hike rather than an ease. Core inflation appears stuck above three percent, energy-driven price pressures from the Iran war remain unresolved, while labor market and financial conditions are resilient.
 
The Fed works with blunt tools and within limited frameworks. Its single national interest rate cannot target individual sectors like housing or specific prices, and its goal remains controlling inflation rather than propping up housing, or equity prices. The Fed also never established a clear framework for when and how to use its balance sheet as a monetary or financial-stability tool, or how quickly to unwind quantitative easing.
 
AI is currently acting as an inflationary force, not a disinflationary one. It is driving a surge in capital expenditures that should push market rates somewhat higher to balance increased demand for capital.
 
Patterson and Ferguson discuss the life of Alan Greenspan—including his daily engagement with the U.S. economy for over fifty years, his habit of tracking unconventional indicators like railroad car loadings, and the fact that he was more often right than wrong on major issues. As Ferguson notes, Greenspan was part of a group of economic policymakers in the second half of the 20th century that helped the U.S. economy grow globally, overcoming the Soviet Union.
 
Mentioned on the Episode:
 
Sebastian Mallaby, “Alan Greenspan Understood Power and Was Not Afraid to Wield It,” The Washington Post
 
“Federal Reserve Issues FOMC Statement,” Board of Governors of the Federal Reserve
 
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The Spillover is a production of the Council on Foreign Relations. The opinions expressed on the show are solely those of the hosts and guests, not of the Council, which takes no institutional positions on matters of policy.

In this episode of The Spillover, host Sebastian Mallaby and CFR President Michael Froman speak with former U.S. Commerce Secretary Gina Raimondo and World Bank President Ajay Banga about the global jobs challenge facing millions of young people in emerging markets. 
 
Hosts:
 
Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics, Council on Foreign Relations (CFR)
 
Michael Froman, CFR President
 
Guests:
 
Gina Raimondo, Distinguished Fellow, CFR; Former U.S. Secretary of Commerce (2021–2025)
 
Ajay Banga, President, World Bank Group
 
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The Spillover is a production of the Council on Foreign Relations. The opinions expressed on the show are solely those of the hosts and guests, not of the Council, which takes no institutional positions on matters of policy.

The scale of the SpaceX IPO is dominating financial headlines, but the more important story might be what the sale reveals about the structure of modern capital markets, corporate governance, and the blurry line between public and private investing. This episode unpacks what the numbers actually show, why much of the popular narrative is overblown, and what investors should actually be paying attention to.
 
Hosts:
 
Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics, Council on Foreign Relations (CFR)
 
Rebecca Patterson, Senior Fellow, Council on Foreign Relations (CFR)
 
We discuss:
How the SpaceX IPO could raise around $75 billion, making it the largest IPO in history, and value the company at $1.77 trillion.
How subsequent IPOs by Anthropic and OpenAI could bring a wave of funding valued at close to $200 billion in total. 
Why the equity supply panic is overblown.
SpaceX's alarming governance structure, under which Musk serves as CEO, CTO, and chairman simultaneously, holding a supermajority of votes despite a minority equity stake.
How growth equity, unlike traditional private equity, offers zero oversight, often granting founders supervoting shares and investor loyalty pledges that amount to anti-governance rather than governance.
How SpaceX's initial index weight will be tiny, since only a small fraction of the company will actually be publicly floated.
How the S&P's profitability requirement is a deliberate lesson from the dot-com bust.
Why SpaceX's revenue projections sound dazzling but tell only half the story, given that estimated capital expenditure could far outpace revenue through the end of the decade.
 
Mentioned on the Episode: 
 
“IPOs: Number and Proceeds,” U.S. Securities and Exchange Commission
 
Jason Dean, “U.S. Officials Said to Discuss Taking Stakes in AI Companies,” The Information
 
Natalia Emanuel, Emma Harrington, and Amanda Pallais, “Remote Work Leaves Younger Workers Sidelined,” Federal Reserve Bank of New York
 
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The Spillover is a production of the Council on Foreign Relations. The opinions expressed on the show are solely those of the hosts and guests, not of the Council, which takes no institutional positions on matters of policy. 

This episode unpacks why the trade and investment imbalances between the United States and China have grown to record levels despite years of pressure to correct them, and how the imbalanced system looks increasingly likely to collapse under its own weight.
 
Hosts:
 
Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics, Council on Foreign Relations (CFR)
 
Rebecca Patterson, Senior Fellow, Council on Foreign Relations (CFR)
 
Guest:
 
Brad W. Setser, Whitney Shepardson Senior Fellow, Council on Foreign Relations (CFR)
 
We discuss: 
How China’s 2025 current account surplus shattered records at $735 billion, jumping nearly 60 percent in one year.
Why China’s overall trade surplus looks modest as a share of its own GDP but is unprecedented in absolute dollar terms, and arguably as a share of the global economy.
As CFR expert Brad Setser puts it: “Trade should be two way. We sell to you, you sell to us. Not just one way.”
How cheap Chinese goods and bond-buying benefited U.S. consumers and borrowers, even as they hollowed out manufacturing and fueled financial froth.
Why China’s real leverage has shifted from dumping U.S. Treasury holdings to controlling rare earths, critical minerals, and permanent magnets the Fed can’t print.
How China masks its holdings by moving out of U.S. custodians, leaving official data badly understating what it actually owns.
Why the Belt and Road Initiative backfired, turning roughly $1 trillion of influence-buying into resentment and unpaid loans.
Why China could let its currency appreciate but won’t, since a weak renminbi keeps the export engine running.
Why Chinese leader Xi Jinping refuses to shift toward a consumption-driven model, viewing direct cash transfers as “welfarism.”
Why the upcoming G7 summit is unlikely to fix any of this, turning the fight into China versus Europe as the system risks collapsing under its own weight.
 
Mentioned on the Episode: 
 
Anne-Sylvaine Chassany, “Germany to Punish Ministries for Failing to Spend Funds Quickly Enough,” Financial Times
 
“A Conversation With Ambassador Jamieson Greer,” CFR.org
 
Brad W. Setser, “Time to Stop Forecasting China’s Surplus Away,” CFR.org
 
Mark Sobel, “Global Imbalances: Grandeur and a ‘Nothingburger’,” OMFIF
 
“The U.S.-China Trade Relationship: What’s Behind the Competition?,” CFR.org
 
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The Spillover is a production of the Council on Foreign Relations. The opinions expressed on the show are solely those of the hosts and guests, not of the Council, which takes no institutional positions on matters of policy.

As governments around the world ramp up defense spending, a new era of rearmament is reshaping economies, markets, inflation, and politics. This episode examines Japan’s dramatic shift away from its postwar pacifist identity amid rising tensions with China, ongoing conflicts in the Middle East, and growing uncertainty around the global security role of the U.S.
 
Hosts:
 
Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics, Council on Foreign Relations (CFR)
 
Rebecca Patterson, Senior Fellow, Council on Foreign Relations (CFR)
 
We discuss: 
Why the rearmament boom is globally synchronized and big enough to move fiscal balances and bond markets.
How defense spending is colliding with already massive government debt, and pushing bond yields higher.
Why Japan’s military transformation marks a significant reversal of its postwar identity.
Why Japan’s debate over nuclear weapons remains emotionally raw more than eighty years after Nagasaki.
How fear of China and doubts about the U.S. security umbrella are reshaping politics in Japan and Germany.
How governments are trying to fund massive military buildups without cutting popular programs, and why bond markets may eventually force a reckoning.
How rising military spending could fuel another wave of inflation, higher interest rates, and global market volatility, trapping central banks between fighting inflation and financing governments at war.
As Rebecca Patterson puts it: “All this is happening when governments, frankly, can't afford more guns or butter because debt levels are very high.”
How AI, drones, and cyberwarfare are rapidly changing the economics and strategy of modern conflict.
How the new arms race is spilling far beyond the battlefield into tech, energy, supply chains, and the future of globalization.
 
Mentioned on the Episode:
 
David Kelly, “Five Scenarios for the Federal Debt,” J.P. Morgan Asset Management
 
“Fiscal Policy under Pressure: High Debt, Rising Risks,” International Monetary Fund (IMF)
 
“Global Supply Chain Pressure Index (GSCPI),” Federal Reserve Bank of New York
 
“Majority of Japanese Support Constitutional Revision: Poll,” UPI
 
“Rebuilding Our Military,” The White House
 
“The True Cost of Peace: Rebalancing World Military Spending For a Sustainable and Peaceful Future,” United Nations
 
“World Economic Outlook: Defense Spending,” International Monetary Fund (IMF)
 
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The Spillover is a production of the Council on Foreign Relations. The opinions expressed on the show are solely those of the hosts and guests, not of the Council, which takes no institutional positions on matters of policy.