The Week: Iran, SpaceX, and a Nervous Bond Market

What It Covers

Scott Galloway and Ed Elson analyze three converging crises in late May 2025: the Iran war's economic fallout, the bond market hitting 5.2% thirty-year yields, and SpaceX's contested $2 trillion IPO valuation versus $19 billion in revenue.

Key Questions Answered

• •Bond Market Alarm: Thirty-year Treasury yields reached 5.2% — levels unseen since 2007 — while odds of a Fed rate hike before year-end jumped from under 10% to over 40%. Rising yields increase mortgage, auto loan, and credit card costs simultaneously, signaling broad economic tightening ahead.
• •AI Debt Risk: Private credit loans funding AI companies carry floating interest rates, meaning rising yields directly inflate their debt service costs. If CapEx continues outpacing revenue — which most analyses suggest is nearly inevitable — overleveraged AI firms face a compounding cost-revenue squeeze with limited exit options.
• •SpaceX Valuation Gap: SpaceX targets a $2 trillion IPO valuation at 106 times sales on revenues below Macy's, while Nvidia trades at under 22 times sales despite growing revenues 85% year-over-year. Scott Galloway predicts SpaceX prices closer to $600 billion within six to twelve months.
• •Geopolitical Leverage Deficit: Trump entered Iran negotiations without congressional support, allied coordination, or Hormuz defense mechanisms in place, leaving the US with minimal bargaining power. Meanwhile, the Russia-China strategic alignment — described as the most consequential geopolitical shift of the past decade — continues deepening through energy and military cooperation.