The Federal Reserve’s roughly $8 trillion balance sheet continues to inject liquidity even as core PCE inflation and M2 money supply both hit the 90.9th percentile of their 12-month ranges. M2 rose to $23.05 trillion in May 2026, up 1.1% in a month, while core PCE climbed to 130.08 with a 0.3% monthly gain. The 10-year Treasury yield sits at 4.48%, near the top of its 12-month range, and the 10-year minus 2-year spread has compressed from 0.74% in February to 0.35%, touching a 12-month low of 0.27% in June. Equity volatility remains low with the VIX at 16.59, contradicting bond market stress and creating asymmetric risk for long-term portfolios.