The U.S. monthly deficit hits $432 billion, yet it’s still fighting an increasingly expensive war In July, the U.S. recorded a monthly fiscal deficit of $432 billion, with the cumulative deficit for FY2026’s first ten months nearing $1.8 trillion. Meanwhile, the ongoing conflict with Iran shows no signs of ending, and there’s even a possibility that the U.S. might escalate its efforts in the war. The Pentagon previously disclosed that direct war costs have already reached $37.5 billion, and that’s just the spending so far. Additional costs for replenishing missile stockpiles, restoring equipment, maintaining fleets, and overseas bases will continue to pile up. The longer the war drags on, the more military spending the U.S. will need to allocate, further increasing fiscal deficits and debt issuance pressures. On the other hand, the prolonged disruption of normal navigation through the Strait of Hormuz will push up oil, gasoline, shipping, and commodity costs, making it harder for U.S. inflation to come down. In other words, the U.S. is borrowing more money because of the war, while the war itself is preventing borrowing costs from decreasing. If inflation remains high, the Federal Reserve will find it difficult to lower interest rates quickly, and the U.S. Treasury will still need to finance its massive deficit in a high-interest-rate environment. The more Treasury bonds issued, the higher the interest payments, and the greater the fiscal pressure for the following year. Currently, the U.S. is already spending nearly $1 trillion annually on interest payments alone. If the war drags on, it’s essentially adding new long-term expenses to an already strained fiscal structure. So, as long as Iran continues to block the Strait of Hormuz, forcing the U.S. to burn through military funds, missiles, and strategic oil reserves, while keeping energy prices high to suppress inflation, the economic costs for the U.S. will only grow over time. Although the U.S. has far superior military capabilities compared to Iran, the longer the war lasts, the more unfavorable it becomes for the U.S. under its current fiscal deficit and inflation pressures. Personally, I think the U.S. might settle for a quick blitz-style strike against Iran and call it a day. @Gate Crypto, U.S. stocks, Hong Kong stocks, Korean stocks, gold, CFDs, prediction markets—all in one place for trading!