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Stephanie Pomboy: Rising Bond Yields Are EVERYONE'S Problem

Adam Taggart | Thoughtful Money® Aug 5, 2026

Summary

Higher-for-longer rates look structural: record Treasury supply, resurgent corporate borrowing, and Bank of Japan selling all pressure long-end yields regardless of the Fed.

Pomboy argues hyperscaler earnings flatter to deceive: mark-to-market gains (paper profits on unsold stakes) and coming depreciation inflate reported profits.

Buybacks have stopped and companies are net stock issuers, while private credit demand now rivals federal borrowing — a capital supply test for markets.

Pomboy sees a ~$4 trillion pension shortfall and likely bailouts that would expand the Fed balance sheet and flood the system with new dollars.

She expects commodities, energy, and copper to outperform financial assets as deglobalization and inflation siphon liquidity toward hard assets with fixed supply.

Adam Taggart's takeaways

  • Top takeaway Adam argues a better path exists — letting malinvestment clear and bad debts default through a couple of rough years — though he doubts policymakers will choose it.
  • He relays Fred Hickey's adjusted-earnings math that puts hyperscaler P/E ratios nearer 65 than the headline teens-to-low-20s once one-time Anthropic gains and the coming depreciation wave are counted.
  • He frames July 2026 as a warning tape: the worst July for the NASDAQ in 25 years, the biggest July bond-yield spike since 2005, and the largest July oil-price spike in over 30 years.
  • He pushes back on pure pessimism, telling viewers the informed active investor has agency and can still do well by positioning for these trends.

Stephanie Pomboy's takeaways

  • Top takeaway Stephanie's top call: higher-for-longer rates are here to stay, because AI-capex borrowing is crowding out a Treasury that must roll $10 trillion this year — with Bank of Japan selling adding pressure on the long end.
  • She contends hyperscaler earnings are low quality — about half of Amazon's Q1 profit was Anthropic mark-to-market paper gains — while free cash flow has gone negative and buybacks have given way to net stock issuance.
  • She sees de-globalization as a secular force pushing inflation and rates higher for years, siphoning the economy's growing share of liquidity away from financial assets and ending easy dartboard-style stock wins.
  • She stays a commodity bull: with stocks and bonds being issued hand over fist, hard assets that cannot be printed — energy and copper included, which also hedge the AI build-out — are the better relative bet.
  • She expects a pension bailout once the roughly $4 trillion underfunding meets a bear market and sees the Fed's balance sheet possibly exceeding $15 trillion; her own portfolio was unchanged as of early August 2026 — heavier energy, waiting on gold, dry powder in T-bills.

Darius Dale's takeaways

  • Top takeaway Adam says Darius Dale labels the administration's current course the run-it-hot scenario — trying to grow its way out of the debt burden.
  • Per Adam, Dale expects the grow-your-way-out plan to fail over the long run, making money printing the inevitable endgame — a view Stephanie endorses.

Kevin Warsh's takeaways

  • Top takeaway Stephanie argues Kevin Warsh's hawkish program ignores the elephant in the room — who will be buyer of last resort for Treasuries — and that a credit crisis would force him to expand the balance sheet anyway.
  • Despite the Fed under Warsh saying it will resist balance-sheet growth, the sheet keeps expanding — up over $200 billion since December's 'non-QE' began, as Adam notes.
  • Adam pictures Warsh as ruler of a sandcastle at the water's edge: hawkish chest-beating that the coming wave of borrowing needs will overwhelm, forcing a repeat of past printing sins.
  • Stephanie dismisses the fixation on the Fed funds rate under Warsh, noting the long end of the curve has moved in the opposite direction the last several times the Fed moved it.

Scott Bessent's takeaways

  • Top takeaway Stephanie says Scott Bessent campaigned on ending reliance on T-bill issuance but concluded on day one there was no way around it, so the heavy T-bill program continues until long-term rates fall.
  • Adam calls Bessent's task — cutting government borrowing costs while Washington rolls $10 trillion and competes with private issuers — effectively impossible.

Tavi Costa's takeaways

  • Top takeaway Adam invokes Tavi Costa's commodity-complex-versus-S&P chart, still bouncing around secular lows as of the video, as the setup for expecting commodities to start outperforming financial assets.

Fred Hickey's takeaways

  • Top takeaway Adam relays Fred Hickey's deconstruction of hyperscaler earnings: adjusted for one-time gains and the coming depreciation wave, P/E ratios look closer to 65 than the headline teens-to-low-20s.
  • Hickey argues a big chunk of Alphabet's latest earnings was a one-time, non-recurring booking of gains on its Anthropic stake.
  • He warns a depreciation wave from AI data-center investment has yet to hit reported profits, and Adam counts him among the guests calling the AI space a bubble.