Stephanie Pomboy: The Economy Is A 'Slow-Motion Train Wreck' In Progress

Grinding our way towards recession?

Analyst Stephanie Pomboy returns for her bi-weekly macro & market update.

We discuss the ongoing slowdown in consumer spending, the repercussions of stubbornly high bond yields, the impact of the latest tariff developments and the passage of the One Big Beautiful Bill, as well as where she thinks the economy is ultimately headed.

Punchline: she is seeing more & more signs the economy is buckling under the weight of elevated bond yields.

In her view, a “slow-motion train wreck” is in progress.

To hear why, click here or on the video below:

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Adam’s Notes: Stephanie Pomboy (recorded 7.8.25)

EXECUTIVE SUMMARY:

• Consumer Weakness Intensifying: Declining consumer credit, particularly a rare drop in credit card borrowing (and Amazon Prime Day spending down 14%) signal a weakening consumer, exacerbated by student loan repayments and wage garnishments affecting millions.

• Debt Saturation Risks: The consumer is nearing debt saturation, with buy now pay later (BNPL) schemes and rising delinquencies indicating distress, potentially leading to a broader credit crunch as credit agencies now track BNPL data.

• Housing Market Strain: High mortgage rates (6.7%) and housing costs (46% of median household budgets vs. a 30% norm) constrain affordability, requiring rates to drop to 4% or significant home price declines to ease pressure.

• Potential Credit Contagion: Student loan delinquencies could trigger