Rising Stagflation Concerns Amid U.S. Tariff Policies

According to Odaily, veteran strategist and prominent U.S. stock market bull Ed Yardeni has analyzed the increasing likelihood of stagflation due to the cumulative impact of tariffs. These tariffs are expected to be borne by foreign exporters to the U.S., American importers, and consumers, either individually or collectively. The consequence is anticipated to be rising prices and lower corporate profit margins compared to a tariff-free environment. Over the past three years, the U.S. economy has shown resilience in the face of tightening monetary policy. However, consumer confidence in the economy's ability to maintain this resilience under U.S. President Donald Trump's tariff policies is waning. Recent data indicates that concerns over stagflation are beginning to undermine the strong performance of the U.S. economy, which has not experienced a recession since the pandemic lockdowns began in early 2020. Yardeni suggests that the probability of stagflation has increased to 45%, reflecting the potential for the current stock market correction to develop into a full-blown bear market. In other words, if stagflation occurs, the stock market is expected to enter a bearish phase.