Rate cuts? Even the Fed’s new chair admits companies are easily raising capital on financial markets

Before SpaceX’s historic IPO, Goldman Sachs estimated IPOs in 2026 will generate a total of $225 billion in proceeds—up from a prior view for $160 billion and 2025’s tally of just $44 billion.

In addition to IPOs, companies are using secondary stock offerings to build up their war chests. Google parent Alphabet netted nearly $85 billion proceeds this month, in what was the biggest equity capital markets transaction ever, at the time.

Meanwhile, corporate bond issuance in the year through May totaled $1.23 trillion, up 21% from a year ago as hyperscalers take on debt to fuel massive AI spending, according to the Securities Industry and Financial Markets Association.

More debt is on the way. In fact, after SpaceX sold $85.7 billion in stock from its IPO this month, it’s reportedly preparing to issue $20 billion in bonds. AI chip leader Nvidia is also looking to raise more than $20 billion in its first debt sale since the AI boom began, sources told CNBC.

Convertible debt is also popular, and issuance from U.S.-listed firms in the year to date is up 43% from the same period in 2025 to $54 billion.

To be sure, financial conditions aren’t as loose elsewhere, namely in the housing market. Since the Fed hiked rates aggressively to fight post-COVID inflation, home sales and construction have stagnated.

Last year’s rate cuts did little to help, especially after President Donald Trump’s war on Iran sent oil prices and bond yields soaring earlier this year.

But in his first press briefing as Fed chair on Wednesday, Kevin Warsh nodded to the gusher of capital coming out of Wall Street, even as he said that monetary policy overall is “somewhat restrictive.”

“I would have a hard time managing to say those words if I were to see what’s happening in financial markets,” Warsh admitted. “So I’d say it’s uneven. That’s perhaps a function of different transmission mechanisms of monetary policy, whether monetary policy is coming from our interest rate tool or our balance sheet tool.”

That acknowledgement contrasted with his surprisingly hawkish remarks on high inflation, which he called a choice, suggesting that Warsh will pursue more aggressive steps to cool prices rather than look past the current spike as temporary.

But investors will keep pouring 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 top $2 trillion by year’s end.

Of course, financial markets in general have ballooned in size, making the record-setting dollar figures look less impressive in that context.

Analysts at Deutsche Bank pointed out on Tuesday that the total volume raised from U.S. IPOs so far this year represents only about 0.2% of the S&P 500’s market capitalization. By comparison, new issuance in 1993 was 2% of the S&P 500.

A lot has changed since then—including the tech sector’s market dominance after the dot-com, social media, and AI booms—accounting for the wide gap.

“In the early 1990s, the public markets were the primary venue for capital formation. Companies went public earlier in their life cycles to secure essential growth capital,” Deutsche Bank said. “Today, structurally deep private markets (venture capital and private equity) fund that growth phase and in additional stricter regulation makes it more onerous to list. The 2026 boom largely consists of mature mega-cap companies exiting, rather than an early-90s-style wave of emerging businesses using the public market to build.”