In this in-depth interview from the PFI Talks series by the Prague Finance Institute, renowned economist Maurice Obstfeld — Senior Fellow at the Peterson Institute for International Economics, former Chief Economist of the IMF, and former adviser to President Obama — issues a stark warning: America’s rising debt, eroding fiscal discipline, and political gridlock are creating systemic risks far beyond its borders.As the world continues to rely on the dollar and U.S. Treasury markets for stability, Obstfeld explains why this "exorbitant privilege" may no longer be sustainable. From the weakening foundations of the dollar’s dominance to the global consequences of U.S. policy paralysis, Obstfeld paints a sobering picture: “We are in the eye of the storm.”What you’ll learn in this interview:• Why U.S. fiscal policy threatens global financial stability• How the dollar’s safe-haven status could be undermined• The dangers of political dysfunction and growing inequality• Whether the world is quietly preparing to move away from the dollar system• What policy changes are urgently needed to avoid a future crisis

Jiri Zatloukal, a financial journalist and contributor to PFI Talks, talked with Maurice Obsfeld.