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Things To Fall Apart After The Mid-Terms? | Stephanie Pomboy

Adam Taggart | Thoughtful Money® Jul 1, 2026

Summary

Pomboy expects contained credit stress until after the November midterms, with consumer strain and rising oil exposing cracks any time after.

She argues the funds rate is now irrelevant, with the Fed balance sheet serving as the true tool of monetary accommodation.

Global strategic petroleum reserve rebuilding (emergency oil stockpiles) plus central bank gold repurchase should put a durable bid under energy and metals.

The AI trade has narrowed into semiconductors while hyperscalers burn free cash flow, shifting from buyback buyers to net issuers and borrowers.

Pomboy is adding energy on the pullback, eyeing rare earths and strategic resources, and held her precious metals through a 25% drawdown.

Adam Taggart's takeaways

  • Top takeaway The host says the AI complex is his biggest risk to the economy: the pin that matters is whatever forces analysts to cut expected AI capex, which would trigger write-downs in pervasive, over-owned AI stocks and hit the top of the K hardest.
  • He cites Jesse Felder's argument plus comments from engineers building data centers that physical constraints — capacitors, permitted land, water, copper, skilled labor — are already slowing AI buildouts despite funding being in place.
  • He has stuck his neck out with recent guests that the market is wrong on the Fed: the next move is more likely a cut than a hike, contrary to the hawkish read of Kevin Warsh's press conference.
  • He warns the AI trade is narrowing into a highly cyclical semiconductor sector carrying the whole market, likening it to the Titanic with the bow still above water.
  • He says he is thinking seriously about putting his 'gold eyes' back on, arguing the pullback has flushed out speculative tourists while real-money buyers step in, though he wants to see the dollar roll over first.

Stephanie Pomboy's takeaways

  • Top takeaway The guest's headline call: nothing material breaks before the November 2026 midterms, but credit cracks are most likely any time after, as oil moves back up onto consumers already struggling to pay bills.
  • She worries most about the top of the K: markets priced for perfection on AI and interest rates will meet disappointment, and a risk-off shock there — including housing — ricochets into layoffs and credit quality at the bottom.
  • She argues the balance sheet, not the funds rate, will be the Fed's real tool of accommodation, setting up a 180-degree disagreement with Kevin Warsh's purported plan to cut rates while shrinking it.
  • She is more concerned about yields rising from competition for capital and credit stress than about disinflation from lower oil, which she expects to edge higher from around $65-70 for the next several years.
  • She is holding precious metals through the roughly 25% pullback as a dip in a long-term bull market, and plans to add energy exposure plus rare earths and other strategic resources, viewing a global resources cold war as putting a bid under commodities.

Kevin Warsh's takeaways

  • Top takeaway Per the speakers, markets read Fed chair Kevin Warsh's recent post-FOMC press conference as hawkish — an anti-Dudley stance willing to raise rates as high as needed to kill inflation.
  • His purported plan, as discussed, is to cut rates while shrinking the balance sheet — the opposite of the guest's long-held view that the balance sheet is where accommodation will come from.
  • Both speakers nonetheless expect Warsh's next act to be a cut rather than a hike, with credit stress eventually forcing the Fed to ease.
  • They note his hawkish message was easier to deliver because the US-Iran MOU had already pushed oil prices down ahead of the meeting.

Jesse Felder's takeaways

  • Top takeaway The host credits Jesse Felder's argument that AI data-center buildouts could hit physical, real-world constraints — capacitors, permitted land, water, copper, skilled labor — even with the money already raised.
  • He adds that engineers building data centers report in viewer comments that such physical limitations are starting to show up on the ground.

Jeff Currie's takeaways

  • Top takeaway The host says Jeff Currie, whom he interviewed the week before the July 2026 as-of date, warns SPRs are so depleted that refilling becomes critical and points oil prices higher from here.
  • Per the host, Currie plans to play the oil thesis through producers, which he sees as priced for oil to stay around $50-60 for a long time — a level he doubts.