Stephanie Pomboy: We're Not Out Of The Woods Yet

The trade wars have taken Wall Street's eye off of the true threat: bond yields

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Progress on trade deals has returned investor optimism to the financial markets.

The S&P has regained all of its April losses and is now green for the year.

But the growing sense that “everything is going to be OK” ignores the elephant in the room, warns macro analyst Stephanie Pomboy: stubbornly high bond yields.

The longer the US 10year Treasury stays near or above its current 4.5% yield, the more that over-leveraged companies are going to start stumbling.

We discuss the implications should that happen. We also war-game out what it will mean for the economy & financial markets should the Trump Administration succeed in implementing its policy targets….as well as what it will look like if he fails.

For Stephanie’s latest macro & market update, click here or on the video below:

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Adam’s Notes: Stephanie Pomboy (recorded 5.14.25)

EXECUTIVE SUMMARY:

• Trade Optimism Masks Deeper Risks: Stephanie Pomboy acknowledges positive trade developments (e.g., U.S.-China ceasefire, UK deal) but warns that high interest rates and $37 trillion in U.S. debt pose a greater threat to the economy than trade wars.

• Stubbornly High Interest Rates: At 4.5% on the 10-year yield, rates stress the economy, with $8 trillion in debt to refinance in 2025, exacerbated by reduced foreign demand and banking constraints.

• Consumer and Corporate Stress: Rising delinquencies (credit cards, auto loans) and student loan repayments ($60-70 billion annual spending hit) signal weakening consumer balance sheets, while corporate capex freezes create a lag effect of reduced economic activity.

• Trump’s Policy Momentum: The administration’s trade deals, tax cuts, deregulation, and $10 trillion in reshoring commitments build momentum, potentially