Trump Announces War Dividend: US$ 1,776 stimulus for Military and Persistent Inflation Signal

[Igor Pereira]

President Trump closed his speech at 11:40 p.m. (Beria time) with an announcement that mixes fiscal populism with geopolitical preparation. He confirmed the immediate dispatch of a "Dividend to Warriors" (Warrior Dividend an incentive check for US$ 1,776 for 1,450,000 American soldiers active.

The phrase echoing on the market is: "The checks are already on their way".

By Igor Pereira

Although the total value (approx. $2.5 billion) be a drop in the ocean of the American budget, the signal sent is highly inflationary and worrying for long-term fiscal health.

1. The Symbolism of 1776 and the Economy of War: The value of $1,776 (year of independence) is a patriotic move, but the timing — just before a potential military movement ("before sending them to war") — suggests that the US is moving to a War Economy. Historically, war economies are inflationary because the government spends without worrying about deficits to finance the conflict.

2. The Fed Nightmare: You are absolutely right in your analysis: this generates inflation for longer. The Federal Reserve is trying to unheat the economy with interest, but the Executive (Trump) continues to inject money directly into people's pockets (in this case, military).

   • Conflict: Restrictive Monetary Policy (Fed) vs. Expansive Fiscal Policy (Trump).

   • Result: Inflation does not fall as fast as expected, forcing interest to stay high longer (Higher for Longer).

For the ExpertFX School traders, this ad handles three main assets:

• Gold (XAU/USD):Gold loves two things: War and government spending out of control. The "prewar bonus" validates the geopolitical risk premium, and the tax injection validates the currency devaluation thesis via money printing. Current support gains strength.

• Treasury Securities (US Treasures): Baixa (Yields Up). The fixed-income market hates that. More spending means the government needs to issue more debt. To absorb this debt and the risk of inflation, investors will require higher rates (yields) in 10- and 30-year bonds.

• Dollar (DXY): Indefinite. There may be a momentary strengthening if the market warrants that the Fed will not be able to cut interest so soon due to this fiscal inflation.

The speech confirms that the American government has no intention of fiscal austerity. On the contrary, it is opening the portfolio in preparation for conflicts.