The Spillover

President Donald Trump is set to meet with Xi Jinping in Beijing for a high-stakes summit shaped by Iran war tensions, trade disputes, critical mineral flows, semiconductor controls, and an intensifying AI race. This episode breaks down the growing U.S.-China rivalry, the risks facing global markets and supply chains, and whether the world is entering a new era of economic fragmentation and technological competition.   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)   We discuss:  How President Trump’s high-stakes summit with Chinese President Xi Jinping comes at a moment of intense rivalry over AI, trade, semiconductors, and Taiwan. How the United States and China are locked into “mutually assured disruption” when it comes to trade, with China controlling critical rare-earth minerals and the U.S. restricting advanced AI chip exports. As Rebecca Patterson puts it: “If there’s not a happy hug between Trump and Xi on rare-earth minerals and chips, that might be problematic.” Whether Chinese AI firms like DeepSeek are catching up to American companies such as OpenAI and Anthropic despite U.S. semiconductor restrictions. The growing debate over AI safety and whether Washington and Beijing can cooperate on preventing dangerous applications of artificial intelligence while still competing for dominance. Why Taiwan remains the single biggest geopolitical risk hanging over global markets, semiconductor supply chains, and the future of the AI economy. How fears of a Taiwan crisis could ripple through global stock markets, especially tech and semiconductor companies tied to firms like TSMC, Nvidia, Intel, and Samsung. Why tariffs and supply chain disruptions continue to reshape global trade, with companies and governments from Europe to Southeast Asia forced to navigate a more fragmented global economy.   Mentioned on the Episode:   “At the Trump-Xi Summit, China Will Have the Upper Hand,” CFR.org   Chris McGuire, “How Trump Should Approach AI Talks With China: Targeted Dialogue, Maximum Pressure,” CFR.org   “Global Supply Chain Pressure Index (GSCPI),” Federal Reserve Bank of New York   Ryan Mancini, “Trump’s Approval on Economy Hits New Low; 7 in 10 Expect Recession Next Year: Poll,” The Hill   Xinyi Wu, “China, Indonesia Launch Cross-Border QR Payments – A Boost for the Global Yuan?,” South China Morning Post   Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released. 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.

Prediction markets have grown into a multibillion-dollar industry. This episode asks whether they are powerful forecasting tools or gambling platforms in disguise—and what their rise means for how risk and information are priced.   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:   Christy Goldsmith Romero, Former Commissioner, Commodity Futures Trading Commission (CFTC)   We discuss:  How prediction markets are turning the world into a “casino” where you can bet on almost anything, from elections and geopolitics to sports and niche events. The evolution of prediction markets from academic tools to mainstream platforms shaping finance, politics, and culture. Why these markets sometimes outperform polls, where they fall short, and how they blur the line between forecasting and entertainment-driven gambling. As Rebecca Patterson asks: “Are these markets actually useful, or are they just gambling dressed up as forecasting?” The legal gray areas that are allowing prediction markets to expand so quickly and the growing risk of manipulation and insider bets. An anecdote from France, where someone allegedly tampered with a weather sensor to manipulate the outcome of a prediction market bet. How governments and regulators are struggling to keep up. Whether these markets truly reflect the “wisdom of crowds” or just loud, well-funded players.   Mentioned on the Episode:   Anthony M. Diercks, Jared Dean Katz, and Jonathan H. Wright, “Kalshi and the Rise of Macro Markets,” Federal Reserve Board   “The Future of Financial Services Regulation: A Conversation with CFTC Commissioner Christy Goldsmith Romero,” Brookings Institution   Adam Hoffer and Jacob Macumber-Rosin, “Expanded Sports Betting Legalization Would Generate Billions in Tax Revenue,” Tax Foundation   Andy Serwer, “Charles Schwab CEO Explains Why Investing Works—and Gambling Doesn’t,” Barron's   Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released.   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 the concept of a K-shaped economy, examines how AI, war, and climate shocks may be widening inequality within and between countries, and explains why the divide is so hard to measure. It also explores competing responses to the affordability crisis—from Trump’s to Mamdani’s—and asks if a more centrist path could offer better solutions.   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)   We discuss: How a true K-shaped economy features a widening divergence in which some groups accelerate upward while others fall behind. Why measuring the K-shaped economy is complicated, with major disagreements over data and methodology. How asset ownership, not just wages, helps explain why wealthier households pulled ahead during and after COVID through equities, housing, and cheap credit. Why inflation, war-driven energy and food shocks, and different household spending patterns can deepen economic divergence, especially for lower-income households. How the “mega K” concept applies globally, with geopolitical shocks like the Iran and Ukraine wars worsening divides between rich and poor countries. How artificial intelligence and climate change could worsen the K phenomenon, disproportionately pressuring workers, poorer countries, and those without capital. How contrasting policy prescriptions—from Trump’s tariffs and immigration restrictions to Mamdani’s proposed taxes on wealthy second-home owners—reflect competing populist approaches to affordability. How a revival of “radical centrism,” combining fiscally responsible reforms with practical policies to manage inequality, AI disruption, and long-term economic inclusion might help.   Mentioned on the Episode:   “America’s Affordability Crisis Is (Mostly) a Mirage,” The Economist   “Going Bananas Over Affordability,” Inside Economics   “Compare Wealth Components Across Groups,” The Federal Reserve   Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released.   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 explores how the Gulf region transformed into a global “capital of capital,” and the risk of the Iran conflict disrupting that role. It examines the ripple effects on global markets, U.S. tech and AI investment, and the broader balance of economic power if Gulf capital starts turning inward to focus on defense.   Hosts:   Rebecca Patterson, Senior Fellow, CFR   Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics, CFR   We discuss: How the Gulf transformed itself from a group of oil-dependent economies into a global “capital of capital,” attracting trillions in investment, talent, and tech partnerships.  The scale of Gulf sovereign wealth funds and why it became a critical funding source for global markets, especially U.S. tech and AI.  How a prolonged conflict could force Gulf states to redirect capital inward toward defense and reconstruction.  As Sebastian Mallaby puts it: “If the capital of capital turns inward in any significant way, the global effects could be profound.”  How the Iran war challenges the core assumption that the Gulf could remain insulated from geopolitics. The Gulf's history of boom-bust cycles and a key difference in the current bust: it's not about price, but the ability to move energy through key chokepoints like the Strait of Hormuz.  How disruptions hit different Gulf economies in different ways, from physical damage in energy exporters to confidence shocks in hubs like Dubai.  The potential global spillover of less Gulf capital flowing into U.S. markets, private equity, and AI infrastructure and what that means for everyday outcomes—higher bond yields, slower asset growth, and ripple effects on things like mortgage rates.  The big open question: if the Gulf steps back as a global capital provider, who, if anyone, can replace it?   Mentioned on the Episode:   “How the US grows from PIF’s pioneering investments,” Newswire   “Sovereign Wealth Funds and Public Pension Funds Tracker,” Global SWF   Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released.   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.

Live from Washington, DC, this episode unpacks how war, AI, financial innovation, and global institutions are reshaping monetary policy, market stability, and the future of the international economic order.    Host:   Rebecca Patterson, Senior Fellow, Council on Foreign Relations   Guest:   William C. Dudley, Chair, Bretton Woods Committee; Former President and CEO, Federal Reserve Bank of New York   We discuss: Whether monetary policy can still do the heavy lifting in a war-shaken macro environment. AI, productivity, and the inflation debate. The future of the Fed as an institution. The rise of non-bank finance and new financial stability risks. How global financial institutions and digital finance must adapt to structural change.   Mentioned on the Episode:    Pierre-Olivier Gourinchas, “War Darkens Global Economic Outlook and Reshapes Policy Priorities,” International Monetary Fund (IMF)   “Chair Powell’s Press Conference”   The Bretton Woods Committee   Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released.   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 cohost Sebastian Mallaby’s new book The Infinity Machine and answers audience questions on AI, dollar dominance, the impact of Trump’s foreign policy on midterm elections, and more.   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:  Demis Hassabis as a key architect of modern AI and the force behind DeepMind. AI’s upside in medicine and science, especially through AlphaFold and faster drug discovery. The tension between building powerful AI quickly and making it safe. Why the biggest AI winners may be the ones that turn models into useful products. Why the dollar still dominates, even as China and Europe look for ways to challenge it. How Trump’s foreign policy decisions on the Middle East and immigration could sway voters in the upcoming midterm elections. How drones and supply chain choke points are reshaping global conflict.   Mentioned on the Episode:    Sebastian Mallaby, The Infinity Machine: Demis Hassabis, DeepMind, and the Quest for Superintelligence, Penguin Random House   Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released.   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 dives into how the opaque growth and structural risks in private credit, combined with global supply shocks and market stress spurred by the Iran war, are creating a uniquely fragile and unpredictable economic landscape.   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: The rapid rise of private credit, its lack of transparency, and why recent bankruptcies are raising red flags.  How $10 billion in redemption requests were submitted to major private credit funds in the first quarter of 2026—including major funds Apollo, Ares, and Blackstone.  Why this moment isn’t a repeat of 2008, but still presents real risks due to government debt levels and the lack of safety nets for private credit.  As Rebecca Patterson, CFR senior fellow, puts it: “No one has any idea what’s going to happen—and that’s exactly the challenge right now.”  Current structural risks in private credit, including liquidity mismatches, redemption limits (“gates”), and growing exposure to retail investors.  Why financial markets are behaving unusually, with rising bond yields and weakening traditional safe-haven assets.  How central banks are stuck between fighting inflation and supporting growth, creating a far more complex policy environment than past crises.   Mentioned on the Episode:   Sebastian Mallaby, The Infinity Machine: Demis Hassabis, DeepMind, and the Quest for Superintelligence, Penguin Random House   Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released.    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 the evolving U.S.-China AI rivalry, the limits of technological export controls, and what’s really at stake as both countries race to shape the future of intelligence.   Submit Your Question For a Chance to Win a Copy of Sebastian Mallaby’s Book The Infinity Machine!    Host:   Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics, Council on Foreign Relations (CFR)   Guest:   Chris McGuire, Senior Fellow for China and Emerging Technologies, CFR   We discuss: How U.S. export controls on chips are slowing China’s AI progress, but not stopping it, as loopholes, smuggling and cloud access weaken enforcement. Why China’s progress is stronger than expected, with competing models only months behind the U.S. As Chris McGuire, CFR senior fellow, puts it: “Whoever has the better AI is going to have the offense-defense advantage in the cyber realm.”  Why compute and advanced chips are the real bottleneck. Why the “AI intelligence explosion” is overstated, with real-world deployment slowed by infrastructure, regulation, and human constraints. The tension between containing China and working with it on global AI safety and governance.   Mentioned on the Episode:    Sebastian Mallaby, The Infinity Machine: Demis Hassabis, DeepMind, and the Quest for Superintelligence, Penguin Random House    Chris McGuire, “The New AI Chip Export Policy to China: Strategically Incoherent and Unenforceable,” CFR.org   Chris McGuire, “Trump’s Reversal on AI Chips is a Historic Blunder,” The Washington Post    Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released!   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 the U.S.-Israel conflict with Iran escalates, global markets are absorbing the shocks: oil prices are swinging, inflation expectations are rising, and safe-haven assumptions are being tested. China, by contrast, is looking relatively resilient, buoyed by strategic energy reserves, diversified supply chains, and policy flexibility. This episode examines how the conflict is driving inflation, complicating monetary policy, and handing China a geoeconomic edge.   Submit Your Question For a Chance to Win a Copy of Sebastian Mallaby’s Book The Infinity Machine!   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)   Mentioned on the Episode:    Sebastian Mallaby, The Infinity Machine: Demis Hassabis, DeepMind, and the Quest for Superintelligence, Penguin Random House    Coco Feng, “China Issues New Safety Rules for OpenClaw. Here Are the Dos and Don’ts” South China Morning Post    Hany Abdel-Latif and Adina Popescu, “Spillovers From Large Emerging Economies: How Dominant Is China?,” International Monetary Fund (IMF)   Michael Langemeier and Joana Colussi, “Farmer Sentiment Drops Sharply at the Start of 2026 as Economic Concerns Increase,” Purdue University/CME Group   Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released!   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.

How do critical international developments shape economic and financial markets worldwide? Each week, The Spillover examines the ripple effects of global events across policy, geopolitics, economics, technology, and finance. This podcast helps you better understand what’s happening, and why it matters to businesses, the markets, and the world.   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)

On the 250th anniversary of Adam Smith’s The Wealth of Nations, this episode revisits a book that laid the foundations of modern economics and then considers the tensions between free markets and industrial policy today. It highlights the ways in which specialization and global trade remain powerful drivers of prosperity, reflecting Smith’s insight that self-interest can benefit society when shaped by competition and institutions, while noting the ongoing relevance of his warnings about moral judgment, the rule of law, and resistance to cronyism.   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)   Mentioned on the Episode:    “Adam Smith is Misinterpreted and His Influence Overstated,” Economist    Gita Gopinath, “Geopolitics and its Impact on Global Trade and the Dollar,” International Monetary Fund (IMF)    Caitlin Oprysko, “Trump’s Return Supercharges Lobbying Revenues,” Politico   Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released!   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.

U.S. and Israeli strikes on Iran are disrupting energy markets. Iran’s production capacity has been hit, the Strait of Hormuz has essentially been closed, and Iran’s energy-producing neighbors have been dragged into the conflict. This episode looks at the spillovers from the resulting energy price shock and explores how structural shifts, including a surge in U.S. oil production, China’s emergence as a dominant buyer, and the growth of renewables have reshaped oil’s geopolitical and economic role.   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:   Natasha Kaneva, Head of Global Commodities Research, J.P. Morgan   Mentioned on the Episode:    “Outlook for Energy Demand,” International Energy Agency (IEA)    Ignacio Presno and Andrea Prestipino, “Oil Price Shocks and Inflation in a DSGE Model of the Global Economy,” Federal Reserve    John Kehoe, “Iran War Oil Inflation is a Nightmare for RBA,” Financial Review   Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released!   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.

Is there an AI bubble, or just an OpenAI bubble? Markets remain focused on whether valuations can be justified by sufficiently fast revenue growth, while the real economy braces for AI’s impact on productivity, jobs, and other disruptions. With global leaders and tech CEOs convening in India to debate AI governance, the stakes are rising fast. Credit markets, hiring data, and business sentiment could signal whether this year will bring a continued jobless expansion or something more concerning.   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)   Mentioned on the Episode:    Sebastian Mallaby and Sebastian Elbaum, “The AI Trilemma,” Foreign Affairs    Sebastian Mallaby, The Infinity Machine: Demis Hassabis, DeepMind, and the Quest for Superintelligence    Alap Shah, “The 2028 Global Intelligence Crisis,” Citrini Research    Matt Shumer, “Something Big Is Happening in AI — and Most People Will Be Blindsided,” Forbes    Martha Gimbel, “An AI Productivity Boom? Don’t Count Your (Productivity Data) Chickens,” Yale Budget Lab   Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released!   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 a 6-3 decision, the U.S. Supreme Court struck down the government’s use of the International Emergency Economic Powers Act (IEEPA), holding that the statute does not authorize a president to impose sweeping tariffs. In this breaking news episode, host Rebecca Patterson is joined by Michael Froman, president of the Council on Foreign Relations and a former U.S. trade representative, to unpack the decision and discuss potential spillovers into financial and labor markets.   Host: Rebecca Patterson, Senior Fellow, Council on Foreign Relations (CFR)   Guest:  Michael Froman, President, Council on Foreign Relations (CFR)   Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released!   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. 

European leaders are at an inflection point. After high-level meetings in Munich and Brussels, they must decide what role Europe will play in the unfolding new world order, politically and economically. Can China, India, and Brazil provide lessons on how to navigate the U.S. trade war? Can a “multi-speed” Europe with less and simpler regulation become a reality? As the world’s second-largest economy, the EU’s choices will shape global growth—and markets are watching.   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:    Edward Fishman, Senior Fellow and Director of the Maurice R. Greenberg Center for Geoeconomic Studies, Council on Foreign Relations (CFR); Author, Chokepoints: American Power in the Age of Economic Warfare   Mentioned on the Episode:    Edward Fishman, “Want to stop Trump bullying your country? Retaliate,” The Guardian    “MEPs propose new legal framework for innovative companies,” European Parliament    “How Polymarket Is Turning Bitcoin Volatility Into a Five-Minute Betting Market,” Yahoo Finance    “Why a dart frog poison believed to have killed Alexei Navalny points to the Kremlin,” NBC News   Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released!   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 examines the “Fragile Four” economies—the United States, the United Kingdom, Japan, and France—and why politics is increasingly spilling into financial markets. After a long stretch where markets largely shrugged off political volatility, an “age of inflation” coupled with high debt, aging demographics, rising defense spending, and anxious populations across the Fragile Four are making markets more reactive to political shocks. We break down what’s driving the shift and why cracks are appearing now.   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)   Mentioned on the Episode:    “Accidental ‘crying horse’ toy wins hearts in China,” Reuters    “Economic Anxiety Is a Global Problem,” Gallup   Want to keep up with The Spillover? Sign up to receive an email alert when new episodes are released!   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.