March 2026 Newsletter: A Flywheel of Chaos

The author's central view is that the Fed will likely keep expanding its balance sheet gradually in 2026 rather than printing money on a large scale, though the war against Iran has raised the odds of a bigger print. The newsletter says the Fed's projected 2026 expansion of $220 billion to $375 billion is modest next to past rounds of quantitative easing, and that even $750 billion would be a gain of about 11% on the $6.5 trillion starting size. It calls a print of $2 trillion or more "big" at current balance sheet levels. The war has pushed the Strait of Hormuz largely closed and energy prices up, and the Pentagon has requested $200 billion from Congress, which is not yet outside the gradual range. A big print would require the conflict to last months and damage energy infrastructure, and the writer says the odds of that are rising.