Stephanie Pomboy: The Way We Invest Is Coming To An End

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**Stephanie Pomboy** (0:43)
I think it's important for investors to start wrapping their heads around the idea that the framework in which we've invested for our entire lifetimes is really now coming to an end, and we need to begin to think about how higher inflation, and I'm not talking about return to 9 percent, but generally, we're going to see prices rather than going lower every year, start to edge modestly higher and higher, and most importantly, the cost of capital going up as well, and what the implications are for the financial markets as a consequence.

**Adam Taggart** (1:31)
Welcome to Thoughtful Money. I'm Thoughtful Money Founder and Host, Adam Taggart. Welcoming you here for another bi-weekly macro session with the macro maven herself, Stephanie Pomboy. Hi, Steph, how are you?

**Stephanie Pomboy** (1:42)
Great, how are you doing, Adam?

**Adam Taggart** (1:44)
I'm good. And Steph, I know your schedule is extra busy these days. Thank you so much for making the time here. We are pre-recording this one just because of a few schedule issues. So folks, we won't be taking live Q&A today. We'll try to make that up the next time we do a live one. But there's plenty to talk about. And I guess, Steph, why don't we kick this off with today's big news, which is jobs. We just got the jobs revisions for the 12 months ending March 2025 And it was a big shocker. I mean, I know we all expected it was going to be a big revised number, but it kind of blew away what the street was expecting. Real quick, let me just set the table and then I'll let you expound on it.
We've had a lot of jobs data come in since the last time you appeared in this channel, which wasn't that long ago. But we got the ADP jobs numbers, which showed that definitely jobs were diminishing, job opportunities were diminishing. We then got the Joltz report, which showed that for the first time in many years, but really, I think since some time in 2020, that job applicants now outnumbered job openings. And I know you're very familiar with how long the Fed has been beating the drum of, hey, this labor market is too hot to get inflation down. We've really got to close that alligator jobs between all these openings we have and the dearth of people out there trying to fill them. So this is a real flip in that narrative. And of course, probably, the Fed, I think, had access to all this data leading up to Jackson Hole, or at least they saw, I think, a number of the precursors of it, where that really did seem to be the thing that flipped Jerome's script in the sense that he had been talking about, hey, this jobs market is normalizing, there's nothing to worry about here. We're still trying to cool it a little bit to all of a sudden, whoa, this jobs market is maybe a little bit weaker than we thought, which of course, you and I have been beating that drum forever. Then today, we had the revisions come out. Sorry, wait, then we had the payrolls come out last week.
They were expecting a relatively weak number at 75,000, I believe, never came in at 22,000. I mean, that's essentially stall speed jobs-wise. They revised the June payrolls data to negative. That would have been the first negative print, and I don't know how long, but many years. And the unemployment rate started rising again. Now, if at 4.3%, not a crazy, scary number in and of itself, but if you look at the trend, that's the highest number. Again, the unemployment rate's been at in years. I'm going to bring up a chart about that a little bit for us to talk to. But then we get today's revision, right? And they were expecting maybe a revision downward of 680,000, which is a really big number. But it came out at, and I'm seeing conflicting numbers. One I've seen at 911,000 fewer jobs. I saw another one at 919 I don't know if these are just sort of fat finger typos or if there's any little discrepancy back and forth. It's in the same ballpark, but that's a lot. I mean, that's like 40 percent more than they were expecting. Thirty-five, 40 percent more. So clearly now, Steph, it is becoming obvious that the jobs market is not hale and healthy. Does this mean we're entering into, we're going to start seeing jobs numbers, negative job prints going forward from here? We can debate, but as goes the employment market, so goes the economy. So we've got all this in the soup. Let me hand up a time to you here. What are you seeing in all your analysis?