Senior strategist: The probability of US stagflation and US stocks entering a bear market is increasing

Odaily Planet Daily News Senior strategist and one of the biggest bulls in the U.S. stock market, Ed Yardeni, analyzed that the combined impact of all tariffs is increasingly likely to lead to stagflation. Tariffs will be borne by foreign exporters, U.S. importers, U.S. consumers, or all of them. The result will be higher prices and lower corporate profit margins than without tariffs. Over the past three years, the U.S. economy has been very resilient in the face of tighter monetary policy. But now consumers are losing confidence that the economy can remain resilient under Trump's tariff policy. The latest batch of data shows that stagflation concerns are already eroding the outstanding performance of the U.S. economy, which has not fallen into a recession since the epidemic lockdown in early 2020. Yardeni said that the probability of stagflation has risen to 45%, which also reflects the possibility that the current correction in the U.S. stock market may evolve into a full-scale bear market. In other words, if the economy stagnates, the stock market is expected to enter a bear market. (Jinshi)