Fiscal dominance
WatchWhen the Treasury's needs override the Fed's intentions.
Fiscal dominance is a regime, not a number: this page composes the 7 readings that show whether fiscal need has overridden monetary intent. He reads it as a spectrum with two tests: it begins when it is unclear that rate hikes still fix inflation, and when the central bank starts making exceptions for financial stability (Lyn Alden, 2026-10-03, via What Is Fiscal Dominance?). His verdict on 11 October 2026: the early part of it, what Alden calls the border zone; the strict finish line is not reached. The site does not score the tests. Each gauge keeps its own thresholds and receipts on its home framework.
Net interest as share of receipts
watch since 31 Aug 2026 (was unknown)
Net interest as share of receipts fell 0.1 pp over the month to 19.5 %, 0.5 pp above the cited 19.0 % watch line.
Thresholds, rules and references
| State | Rule | Stated by |
|---|---|---|
| Watch | >= 19.0 % | Janet Yellen, Brookings, Jan 2026 via 3 May 2026 |
| Stress | >= 25.0 % | Project rule — midway between Yellen's current and Moody's 2035 figures |
| Breach | >= 30.0 % | Moody's escalator 9 % (2021) → 18 % (2024) → 30 % (2035) via 18 May 2025 |
References: Yellen 3-decade path 28.0 % (Lavish, 3 May 2026)
Explainer → What If The Fed Raises Rates The Informationist, 24 May 2026 · CSV · JSON
- 31 Aug 2026 unknown → Watch Net interest as share of receipts fell 0.2 pp over the month to 19.6 %, 0.6 pp above the cited 19.0 % watch line.
Net interest as share of GDP
watch since 31 Aug 2026
Net interest $1 052 B over the trailing twelve months is 3.19 % of GDP, 0.01 pp below the project's 3.20 % watch line. Reference points he showed: 1991 peak (Bianco, OMB) 3.20 %; CRFB FY2026 estimate, record 3.40 %.
Annual, fiscal years (OMB via FRED): 30 Jun 1960 to 30 Sept 2025. A different time base from the gauge above, so it is drawn on its own axis.
Thresholds, rules and references
| State | Rule | Stated by |
|---|---|---|
| Watch | >= 3.20 % | Project rule — at or above the 1991 peak (3.2 %) on the Bianco Research chart (OMB/BEA data) he showed on 2026-10-11 |
| Stress | >= 4.00 % | Project rule — midway between the current record (CRFB's 3.4 % for FY2026) and Yellen's three-decade path (5.4 %) |
| Breach | >= 5.40 % | Janet Yellen, Brookings, Jan 2026: net interest 5.4 % of GDP over three decades via 3 May 2026 |
References: 1991 peak (Bianco, OMB) 3.20 % (cited: Bianco Research chart (Bloomberg, BEA, OMB), relayed 2026-10-11, via, 11 Oct 2026) · CRFB FY2026 estimate, record 3.40 % (cited: Committee for a Responsible Federal Budget, relayed 2026-10-11, via, 11 Oct 2026)
Explainer → What Is Fiscal Dominance? free issue; public permalink, 11 Oct 2026 · CSV · JSON
- 31 Aug 2026 Watch Net interest $1 054 B over the trailing twelve months is 3.24 % of GDP, 0.04 pp above the project's 3.20 % watch line. Reference points he showed: 1991 peak (Bianco, OMB) 3.20 %; CRFB FY2026 estimate, record 3.40 %.
Fed balance sheet, 13-week change
calm since 16 Sept 2026 (was unknown)
Fed balance sheet, 13-week change fell $8 B over the week to −$422 M, $50 B below the project's $50 B watch line.
His reading rule We'll know it's more liquidity by the expansion of the Fed's balance sheet.
— Lavish, What Is Fiscal Dominance? (11 Oct 2026)
Thresholds, rules and references
| State | Rule | Stated by |
|---|---|---|
| Watch | >= $50 B | Project rule — expansion beyond reserve-management noise |
| Stress | >= $150 B | Project rule — ≈ $50B/month, QE-scale |
Explainer → How to Read a Fed That Stopped Talking The Informationist, 21 Jun 2026 · CSV · JSON
- 16 Sept 2026 unknown → Calm Fed balance sheet, 13-week change fell $5 B over the week to +$10 B, $40 B below the project's $50 B watch line.
10-year term premium (ACM)
calm since 28 Oct 2026 (was watch)
10-year term premium (ACM) fell 0.24 pp over the month to 0.68 %, 0.07 pp below the project's 0.75 % watch line.
Thresholds, rules and references
| State | Rule | Stated by |
|---|---|---|
| Watch | >= 0.75 % | Project rule — above the 71 bp he flagged as a five-year high |
| Stress | >= 1.00 % | Project rule — no numeric line stated by Lavish for the ACM 10-year |
| Breach | >= 1.50 % | Project rule — no numeric line stated by Lavish for the ACM 10-year |
References: 2025-04-26 0.65 % (Lavish, 27 Apr 2025) · 2025-12-12 0.71 % (Lavish, 14 Dec 2025)
Explainer → The Fed's Cutting Rates: Why Are Mortgages Still Expensive The Informationist, 14 Dec 2025 · CSV · JSON
- 28 Oct 2026 watch → Calm 10-year term premium (ACM) fell 0.10 pp over the month to 0.69 %, 0.06 pp below the project's 0.75 % watch line.
- 25 Sept 2026 calm → Watch 10-year term premium (ACM) rose 0.03 pp over the month to 0.77 %, 0.02 pp above the project's 0.75 % watch line.
- 18 Sept 2026 unknown → Calm 10-year term premium (ACM) fell 0.13 pp over the month to 0.64 %, 0.11 pp below the project's 0.75 % watch line.
Standing Repo Facility
watch since 22 Sept 2026 (was unknown)
Standing Repo Facility take-up was $0.0 B on 6 Nov 2026; 2 of the last 5 sessions saw take-up.
Thresholds, rules and references
| State | Rule | Stated by |
|---|---|---|
| Watch | any(last(5) > 0) | Lavish, 2 Nov 2025 — “when usage starts climbing and staying elevated” |
| Stress | count(last(5) > 10e9) >= 3 | Project rule — persistent, not one-off |
| Breach | any(last(5) >= 50e9) | Project rule — the 2025-10-31 record ($50.35B) as the bar |
Explainer → The Fed's Favorite Lie: This Isn't QE The Informationist, 2 Nov 2025 · CSV · JSON
- 22 Sept 2026 unknown → Watch Standing Repo Facility take-up was $0.0 B on 22 Sep 2026; 4 of the last 5 sessions saw take-up.
SOFR − EFFR
watch since 26 Oct 2026 (was calm)
SOFR − EFFR fell 2 bp over the week to +4 bp, 1 bp below the project's 5 bp watch line.
Thresholds, rules and references
| State | Rule | Stated by |
|---|---|---|
| Watch | >= +5 bp | Project rule — SOFR trading above fed funds |
| Stress | >= +19 bp | Lavish, 19 Oct 2025 — “SOFR-EFFR at +0.19 … this isn't a spike, it's a regime change” |
| Breach | >= +50 bp | Project rule — September-2019-type dislocation |
Explainer → Why QT is Dead and QE is Coming The Informationist, 19 Oct 2025 · CSV · JSON
- 26 Oct 2026 calm → Watch SOFR − EFFR rose 6 bp over the week to +5 bp, 0 bp at the project's 5 bp watch line.
- 21 Sept 2026 unknown → Calm SOFR − EFFR fell 2 bp over the week to −3 bp, 8 bp below the project's 5 bp watch line.