Who needs rate cuts? Even the Fed’s new chair admits companies are easily raising capital on financial markets amid epic stock and debt binge
Markets are losing hope that the Federal Reserve will cut interest rates in the near future and are bracing for potential increases, but the influx of capital provided by companies suggests financial conditions are already somewhat easy.
Before SpaceX’s historic IPO, Goldman Sachs predicted that IPOs in 2026 would generate $225 billion in total revenue; This figure was estimated at $160 billion in the previous forecast and only $44 billion in 2025.
In addition to IPOs, companies are also using secondary stock offerings to build their war chests. Google Parent company Alphabet raised nearly $85 billion this month, the largest capital markets transaction at the time.
Meanwhile, corporate bond issue The year to date has reached $1.23 trillion, up 21% from last year since May, according to the Securities Industry and Financial Markets Association, as hyperscalers borrowed money to fuel massive AI spending.
More debt is on the way. In fact, SpaceX is reportedly preparing to issue $20 billion in bonds after selling $85.7 billion in shares in its IPO this month. AI chip leader Nvidia It also plans to raise more than $20 billion in its first debt sale since the AI boom began. Sources told CNBC.
convertible debt At the same time, year-to-date issuance of popular and US-listed companies has increased by 43% compared to the same period in 2025, reaching $54 billion.
Of course, financial conditions are not so loose elsewhere, namely in the housing market. Home sales and construction have stagnated as the Fed aggressively raised rates to combat post-COVID inflation.
Last year’s rate cuts didn’t help much, especially after President Donald Trump’s war on Iran led to a rise in oil prices and bond yields earlier this year.
But in his first news conference as Fed chairman on Wednesday, Kevin Warsh nodded to the outpouring of capital from Wall Street, even as he said monetary policy was “somewhat restrictive” overall.
“If I had seen what was happening in the financial markets, I would have had a hard time saying those words,” Warsh admitted. “So I would say it’s unbalanced. That’s perhaps a function of the different transmission mechanisms of monetary policy depending on whether monetary policy comes from our interest rate tool or our balance sheet tool.”
This admission contrasted with Warsh’s surprisingly hawkish statements on high inflation, when he suggested he would take more aggressive steps to cool prices rather than consider the current rise to be temporary, calling it a choice.
But investors will continue to pour money into companies. OpenAI and Anthropic will raise tens of billions of dollars when they go public later this year. And corporate debt issuance could hit $2 trillion by the end of the year.
