We develop a nonlinear model in which trend inflation and inflation tail risks emerge endogenously in equilibrium from the interaction between the primary deficit and the risk of supply disruptions. The key friction is limited fiscal responsibility - the government stabilizes debt in the long run but, unwilling to let debt accumulate too quickly, pressures the central bank to restrain interest-rate increases rather than adjust its own budget. The fiscal limit binds asymmetrically across shocks, with inflationary supply shocks especially likely to push monetary policy against the constraint. As supply-shock volatility rises and fiscal space narrows, the constraint binds more often. Anticipating this, agents raise their inflation expectations, causing trend inflation and upside inflation tail risks to rise even before the constraint binds. Movements in supply-shock volatility and fiscal space together account for much of the ratcheting up and down of U.S. trend inflation between 1965 and 1990. Interpreted through the model, the post-pandemic rise in long-run inflation expectations reflects a higher probability of fiscally constrained monetary policy.