Thoughtful Money with Adam Taggart Stephanie Pomboy: We're Not Out Of The Woods Yet
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May 14, 2025 
In this insightful discussion, macro analyst Stephanie Pomboy warns about stubbornly high bond yields, specifically the implications for over-leveraged companies. She highlights how the current 4.5% yield could lead to financial turmoil if it persists. The conversation dives deep into the challenges posed by rising interest rates, potential ramifications on consumer credit, and the banking sector's instability. Pomboy also examines the broader economic landscape, emphasizing the need for sustainable policies amid political dynamics.
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Trade Deal: Not a Cure-All
- The resolution of the trade war is positive but doesn't fix the core economic issues like high interest rates.
- Persistent high yields threaten over-leveraged companies despite trade deal optimism.
High Yields From Supply-Demand Imbalance
- Rates remain high due to massive debt supply and reduced foreign demand for treasuries.
- Monetary authorities may need to resume quantitative easing to support Treasury markets.
Real Yields Drive Current Rates
- Current high Treasury yields primarily reflect real yields, not shifting inflation expectations.
- Elevated rates relate more to technical market factors like the basis trade than to changing economic sentiment.