Tariffs Are a Distraction from the Real Crisis | Stephanie Pomboy

**Tariffs Distract from the Urgent Fiscal Crisis, Warns Stephanie Pomboy**

In a recent interview with Kitco News, macroeconomic analyst and founder of MacroMavens, Stephanie Pomboy, emphasized that the ongoing debate over tariffs is diverting public and political attention from a far more pressing economic challenge: the United States’ unsustainable fiscal trajectory, primarily driven by soaring deficits and mounting national debt. Her insights underscore the urgency for investors and policymakers to focus on the country’s fiscal health, particularly the implications of the 10-year Treasury yield and the broader debt dynamics.

### The Tariff Debate: A Distraction

The debate over tariffs, often framed as a trade war or protectionist measure, has dominated headlines and policy discussions in recent years. While tariffs can impact sectors like manufacturing, agriculture, and consumer prices, Pomboy argues that this issue is largely a distraction. "Tariffs are a sideshow," she states, "they are not the root cause of the economic challenges facing the U.S." Instead, she contends, the real crisis lies in how the country will fund its rising deficits amid changing interest rate environments.

### The Real Crisis: Financing Growing Deficits

The U.S. has experienced persistent budget deficits, which are projected to continue expanding due to increased spending on social programs, defense, and infrastructure, coupled with sluggish revenue growth. These deficits are financed primarily through the issuance of Treasury securities, making the health of the Treasury market a critical indicator of future economic stability.

Pomboy emphasizes that the key to understanding the country’s fiscal outlook is the trajectory of the 10-year Treasury yield. This benchmark interest rate influences borrowing costs across the economy, including for government debt, mortgage rates, and corporate financing. As yields rise, the cost of servicing the national debt increases exponentially, exacerbating the fiscal imbalance.

### The Significance of the 10-Year Treasury Yield

The 10-year Treasury yield serves as a barometer of investor confidence and economic expectations. Historically, low yields have allowed the U.S. government to borrow cheaply, but recent trends suggest that yields are trending upward amid inflation concerns, monetary policy tightening, and increased supply of Treasury bonds to fund deficits.

Pomboy warns that if yields continue to rise significantly, the government’s debt servicing costs could become unsustainable, forcing difficult choices such as increased taxes, austerity measures, or even debt restructuring. For resource and mining companies, understanding these macroeconomic undercurrents is essential, as rising interest rates can influence commodity prices, inflation expectations, and investment flows.

### The Broader Fiscal Trajectory

Beyond the immediate implications of rising yields, Pomboy highlights the broader concern: the long-term sustainability of fiscal policy. Current trajectories suggest that without meaningful reforms—such as entitlement adjustments, revenue enhancements, or spending controls—the U.S. could face a fiscal crisis akin to those seen in heavily indebted nations.

This looming crisis has implications for investors in resource companies and the precious metals sector. An environment of rising interest rates and fiscal uncertainty often fuels demand for safe-haven assets like gold and silver, which historically serve as hedges against inflation and currency devaluation.

### Conclusion

Stephanie Pomboy’s insights serve as a timely reminder that macroeconomic stability hinges on fiscal discipline and prudent debt management. While tariffs and trade tensions generate headlines, the more significant threat lies in the nation’s ability to finance its debt sustainably. For investors in mining and resource sectors, understanding these macroeconomic signals—particularly Treasury yields and fiscal health—is crucial for navigating future market risks and opportunities.

As the debate continues, stakeholders should remain vigilant to the underlying fiscal indicators that could shape the economic landscape in the years ahead. The message is clear: addressing the true fiscal crisis should take precedence over peripheral issues like tariffs, especially given their potential to distract from urgent policy reforms needed to ensure long-term economic stability.

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*For further insights, watch Stephanie Pomboy’s full interview on Kitco NEWS here: [YouTube Link](https://www.youtube.com/watch?v=PIbYX9-gLl0).*