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

Planet Daily News: Senior strategist and one of the biggest bulls on U.S. stocks, Ed Yardeni, analyzed that the cumulative impact of all tariffs is increasingly likely to lead to stagflation. Tariffs will be borne by foreign exporters to the U.S., U.S. importers, U.S. consumers, or a combination of them. The result will be rising prices and lower corporate profit margins compared to a scenario without tariffs. Over the past three years, the U.S. economy has shown remarkable resilience in the face of monetary policy tightening. However, consumers are now losing confidence in the economy's ability to maintain its resilience under Trump's tariff policies. The latest data suggests that stagflation concerns are eroding the U.S. economy's excellent performance, which has not experienced a recession since the initial COVID-19 lockdowns in early 2020. Yardeni stated that the probability of stagflation has increased to 45%, which also reflects the potential for the current U.S. stock market pullback to evolve into a comprehensive bear market. In other words, if the economy experiences stagflation, the stock market is expected to enter a bear market. (Jintian)