GainsPainsCapital warns that a maddening geopolitical news cycle is masking an approaching inflationary storm.
The United States is trapped in a repetitive loop: claims of peace followed by new threats and conflict.
Underlying this cycle is a dangerous fiscal reality.
GainsPainsCapital reports the government is running a $1.9 trillion deficit for fiscal year 2026.
Despite record tax collections, spending remains locked at war-time levels, creating a permanent state of extreme fiscal output.
The Federal Reserve is actively pouring fuel on this fire.
They have slashed interest rates by 1.75 percent over the last 18 months.
The Fed has also initiated a $40 billion per month Quantitative Easing program, totaling nearly half a trillion dollars annualized.
This dual force of fiscal dominance and monetary easing is a classic recipe for catastrophe.
The market has stopped listening to the Fed’s internal models.
The yield on the 2 Year U.S. Treasury recently hit 4.17 percent, signaling that bond investors expect sustained, higher inflation.
Inflation has already accelerated to 3.8 percent as of April 2026, driven largely by energy shocks.
Despite these warnings, the administration continues to demand even more aggressive rate cuts.
The collision with reality is now inevitable.
— QE Infinity (@StealthQE4) June 9, 2026