Ed Yardeni, president of Yardeni Research and one of Wall Street’s most optimistic forecasters, is expressing new concerns about market stability. Despite maintaining his bullish S&P 500 target of 7,000 (second only to Oppenheimer’s 7,100), Yardeni has raised the probability of a recession and bear market to 35%, up from 20%.
He specifically points to “Trump Tariff Turmoil 2.0” as potentially triggering a rare “flash crash” without an accompanying recession, similar to events in 1962 and 1987 that reversed quickly. Yardeni now gives the current bull market only a 65% chance of continuing without correction through 2025, down from his previous 80% estimate.
While he maintains his long-term “Roaring 20s” outlook (55% probability) of a bull market extending into the 2030s, this depends on the trade war not worsening. Notably, Yardeni no longer counts on a “Fed put” after Powell signaled the central bank isn’t rushing to cut rates. Despite these concerns, he still believes in economic resilience and notes that insiders are buying in cyclical sectors, potentially creating buying opportunities.