U.S. government debt is projected to grow by 9.9% according to consumer data.
Federal deficits are now the primary driver of inflationary pressure in the economy.
Treasury yields are elevated because the bond market demands a premium.
Fiscal spending is effectively acting as a secondary stimulus to an overheating economy.
Policymakers have zero room to maneuver without triggering a credit event.
Government spending is the fire that the Fed is trying to put out.
New York Fed survey shows one-year inflation expectations at 3.5%.
Households are bracing for rent hikes of 7.4% and food inflation of 5.8%.
The “soft landing” narrative is being shredded by persistent service costs.
Inflation uncertainty is rising for the one-year and three-year horizons.
Wage growth is failing to keep pace with the real cost of living for families.
Consumers know the truth about prices even if the Fed ignores it.
We are in a long, slow grind of price increases that won’t stop.
https://www.newyorkfed.org/newsevents/news/research/2026/20260608