Israel's cabinet just greenlit their 2026 budget. The plan? Keep defense spending elevated—unsurprising after two straight years of intense conflict. But here's the twist: they're also throwing some relief toward middle-class workers, trying to prop up an economy that's been buckling under pressure.

High military costs aren't going anywhere, but policymakers are clearly feeling the squeeze. Economic strain is real, and this budget reflects an attempt to balance security demands with domestic economic survival. Tax breaks or subsidies for the middle class could mean more disposable income—potentially stabilizing consumer confidence in uncertain times.

For macro watchers, this matters. Fiscal policy shifts in conflict zones often ripple through global risk sentiment, affecting everything from commodities to safe-haven assets. Keep an eye on how this unfolds.