Alan Dunne: The US Is One Recession Away From Fiscal Dominance - finance.biggo.com

Alan Dunne: The US Is One Recession Away From Fiscal Dominance - finance.biggo.com

Source: finance.biggo.com

DW NOTE

The argument isn't novel — it's correct. The U.S. borrowed $1.8 trillion in the first ten months of fiscal 2026 and ran a $1.4 trillion deficit through June. The Fed holds rates at 3.65% while signaling it may raise them further if inflation persists. A recession would collapse tax receipts, force the Fed to cut, and pin yields below the deficit's real cost — the textbook entry into fiscal dominance, where monetary policy exists to finance the state rather than stabilize prices.

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