Rising Yields Are The Greatest Threat Markets Face Today | Stephanie Pomboy

August 5, 2026

AI Summary

5 min read

Stephanie Pomboy opens with a jarring observation: the private sector has borrowed as much as the federal government so far this year. That is unprecedented. For decades, the worry was that Treasury issuance would crowd out corporate borrowers. Now, the reverse is happening. The hyper-scalers—Amazon, Google, and the rest of the AI build-out—have burned through their free cash flow and are tapping credit markets aggressively, at the same time the U.S. Treasury needs to roll roughly $10 trillion in debt this year. The result is a deluge of paper that is pushing long-term Treasury yields higher, and Pomboy argues this is the single most underappreciated risk in markets today.

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What you'll learn

1 (01:00) **Higher for Longer is Here to Stay** - Stephanie Pomboy opens with her core thesis: the rising yield environment is structural, not temporary, and is being driven by the AI capex boom crowding out Treasury issuance.
2 (09:29) **Market Hubris vs. Real Headwinds** - Adam and Steph discuss the disconnect between record stock market levels and the powerful headwinds of rising rates and oil prices.
3 (14:08) **The Illusion of AI Earnings** - Steph explains how mark-to-market gains on AI investments are inflating reported earnings for big tech companies.
4 (18:24) **The Credit Market is Wising Up** - While equities remain complacent, credit markets are showing increasing discernment and concern about the hyper scalers.
5 (22:44) **The Crowding Out Phenomenon** - Steph details the massive and unprecedented deluge of paper being issued by both the government and the private sector.
6 (26:54) **The Bank of Japan is Making it Worse** - The Bank of Japan's intervention to support the Yen is adding further upward pressure on Treasury yields.
7 (30:33) **The Fed's Limited Toolkit** - The Fed has few options to affect the long end of the yield curve outside of expanding its balance sheet.

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Guests on this episode

Adam Taggart

Show Notes

"Higher for longer" bond yields appear to be heading even higher and even longer than Wall Street expected.

This is the greatest threat to asset prices right now, claims Stephanie Pomboy.

Stephanie returns to offer her latest monthly macro and markets outlook.

To hear it all, watch this video.

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