Thoughtful Money with Adam Taggart Stephanie Pomboy: Economy Is A 'Slow-Motion Train Wreck' In Process
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Jul 9, 2025 
Stephanie Pomboy, a macro analyst and market strategist, shares her insights on the economy, highlighting a 'slow-motion train wreck' unfolding. They discuss the decline in consumer spending, rising credit card delinquencies, and the impacts of stubbornly high bond yields. Pomboy emphasizes the disconnect between Wall Street's optimism and Main Street's realities, suggesting potential recession signals. She also critiques the growing economic disparity and the significance of hard assets, like gold, in navigating financial uncertainties.
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The Slow-Motion Consumer Credit Train Wreck Heading Us Into Recession
Stephanie Pomboy explains that the U.S. economy is on a "slow-motion train wreck" due to worsening consumer credit conditions and rising debt saturation. Key issues include:
- Consumer borrowing is declining, notably credit card debt showing its second largest drop since COVID.
- Student loan repayments resumed, causing wage garnishments and reduced consumer spending power, with millions expected to face garnishment soon.
- High interest rates on mortgages (6.7%) and credit cards (average 23%) compound financial stress.
This combination will slow consumer spending, reduce corporate profits, and eventually lower employment, pulling the economy into recession. Pomboy warns that while this may not be a sudden crash, the grinding deterioration of credit quality and spending will have the same devastating effect over time.
Credit Delinquencies Signal Slowdown
- Rising credit card delinquencies force consumers to cut back on spending, signaling an economic slowdown.
- Reduced spending pressures corporate profits and employment, pushing the economy toward recession.
Student Loans Drag Consumer Spending
- Student loan repayment resumption is straining consumer credit, forcing reduced credit card borrowing and spending.
- This may soon reveal in retail sales data as a broader slowdown in consumer spending.