Widely followed strategist Ed Yaldeni, one of Wall Street’s biggest bulls, has lowered his market forecasts and said President Donald Trump’s tariffs are increasing the risk of stagflation. “President Trump’s tariffs made it clear on Wall Street (and us!) that the US has not negotiated tips to help lower tariffs around the world and promote free trade,” Yadeni said in a note to clients on Thursday. “They are trade barriers, causing other countries to respond in physical form, putting US inflation and economic growth at risk.” Yardeni Research has reduced its 2025 Best Case S&P 500 target by nearly 9%, from 7,000 to 6,400, with its worst target at 5,800. The 6,400 new best-case goal still represents more than 20% profit in the equity benchmark from the end of Wednesday. .SPX YTD Mountain S&P 500 2025. The sudden shift in aggressive tariff charges and policies on Trump’s imports into the US have stimulated Wall Street volatility since his inauguration in January, harboring fears of a decline in consumer spending, declining economic growth, low profits and even a recession. The S&P 500 has been shaking near the correction area, about 9% down from its recent peak. On Thursday, investors tackled a new threat from the White House, imposing a 200% tariff on all alcohol products coming from the European Union in 27 countries, and retaliating a 50% tariff on American whiskey in the Bullock. Yaldeni said US trade policy is in turmoil. “We cannot ignore the potential stag effects of Trump 2.0’s policies currently unplanned.” “We are now lowering our S&P 500 rating expectations and year-end price targets in response to the increased risk of stagflation,” Yardeni said. “If tariffs stick, one-off price increases and uncertainty about the impact of inflation expectations are likely enough to suspend the FOMC,” he said, referring to the policy setting unit of the US Federal Reserve. This week Goldman Sachs became the first major sell-side bank on Wall Street to cut its S&P 500 target, lowering its target from 6,500 to 6,200.
