Economist Peter Schiff has warned global investors that the escalating $40 trillion U.S. national debt is unsustainable and will ultimately cause the American financial system to implode. Schiff argues that Washington and the Federal Reserve are trapped in a fiscal loop where they choose inflation over spending cuts to delay a broader economic collapse.

The Debt Spiral

Schiff stated during a recent podcast with commentator Mario Nawfal that the U.S. Treasury operates a "giant Ponzi." He projects the national debt will comfortably surpass $50 trillion by the end of Donald Trump’s current presidential term. The economist highlighted that annualized interest payments have already exploded to $1.6 trillion, creating a compounding cost burden.

Policy Choices and Market Risks

Schiff contends that the Federal Reserve will continually choose inflation to artificially depress yields because allowing interest rates to reflect real market risk would instantly collapse the economy. He noted that policymakers, including current and former Federal Reserve chairs, will consistently opt for inflation rather than facing the alternative of a severe economic downturn.

Market Performance in 2026

Despite the warnings, major U.S. indices have shown gains year-to-date. The S&P 500 index has advanced 9.36%, while the Nasdaq Composite index was up 14.13% and the Dow Jones gained 6.58%.

The SPDR S&P 500 ETF Trust (NYSE: SPY) and Invesco QQQ Trust ETF (NASDAQ: QQQ) closed higher on Thursday. The SPY ended up 1.04% at $746.74, while the QQQ advanced by 2.51% to $740.62. The State Street SPDR Dow Jones Industrial Average ETF Trust (NYSE: DIA) closed 0.12% higher.

President Trump has settled a $100 million lawsuit with his niece, Mary Trump, who had accused him of being "the world's most dangerous man." The lawsuit was filed over allegations that Mary Trump leaked financial information and family tax documents to The New York Times. The settlement was announced in a letter filed on Tuesday with a New York state court in Manhattan. Both parties expect to seek a formal dismissal in the coming weeks, which would prevent the president from filing another lawsuit.

Other Political Developments

The Trump administration received a warning from U.S. intelligence agencies about a potential threat to the new U.S.-Iran peace deal. The warning pointed to Israel's possible interference, as Prime Minister Benjamin Netanyahu faces pressure to continue strikes in Lebanon ahead of the fall elections. Current and former intelligence officials stated that Netanyahu's political future hinges on his commitment to fighting Hezbollah, a goal that the peace deal could undermine.

President Trump suggested that a U.S. operation in Cuba could resemble the rapid raid that captured Venezuelan President Nicolas Maduro in January. Trump, however, did not specify a timeline for such an operation.

Lincoln Memorial Pool Renovation Issues

The National Park Service's decision to add hydrogen peroxide to the Lincoln Memorial Reflecting Pool has brought attention to a $13.1 million renovation project completed under President Trump. A spokesperson for the United States Department of the Interior said the treatment is being used together with an advanced filtration system. The system uses ozone-injected nanobubbles to break down contaminants and toxins.

The $14.7 million renovation of Washington's Lincoln Memorial Reflecting Pool has encountered issues. The paint on the pool started peeling and floating into the algae-tinted water less than two weeks after the project's completion.