❝ I think people forget that it’s not all about Washington. Washington meddles in the economy all the time. And my view, simply put, is it's amazing how well the economy does despite Washington.
Welcome to the 64th episode of The Hale Report. My name is Lyric Hughes Hale, and I am Editor-in-Chief of econVue, and your host today. My guest is Edward Yardeni. Dr. Ed Yardeni is a distinguished economist and investment strategist with over four decades of experience analyzing global financial markets. He is the President of Yardeni Research, Inc., a firm specializing in global investment strategies and asset-allocation analyses.
He earned his Ph.D. in economics from Yale University in 1976, completing his dissertation under Nobel Laureate James Tobin. He has served as Chief Investment Strategist and Chief Economist at a variety of Wall Street institutions such as Prudential Equity Group, Deutsche Bank, Prudential-Bache, and EF Hutton before founding his own firm. Additionally, he has held positions at the Federal Reserve Bank of New York, the Federal Reserve Board of Governors, and the US Treasury. Dr Yardeni is a frequent commentator in the financial media.
Dr. Yardeni sees the S&P 500 reaching 10,000 by the end of this decade and says that ‘animal spirits are back’ after the Trump win. Instead of Dr Doom (my previous guest Marc Faber) or Dr Gloom (Nouriel Roubini) I think that a fair description of Dr Yardeni might be Dr Boom—just in time for some holiday cheer and optimism. He believes that while stock market valuations, although high, are not too high:
❝ Investors will pay a higher P/E the longer they believe that the economic expansion will last. That’s because time is money.
Topics Discussed
Personal insights and background
Broader economic philosophy
Market and investment outlook
Economic scenarios
Monetary policy and the Federal Reserve
Bond markets and fiscal policy
Technological and global economic risks
Lightning Round: testing Ideas and challenging assumptions
Key Moments
❝ I think we're on the early stages of another productivity growth boom. Productivity was growing 0.5% in 2015. It's up to almost 2% right now. So that's a quadruple…and so I think that's the outlook: 3% to 4% growth in productivity over the next five years, which may sound totally delusional. But when you look at the chart, you see that that's kind of where productivity growth cycles peak.
❝ It made a lot of sense to believe that if the Fed funds rate goes from zero to 5.25% in two years, it's got to cause a recession. Why didn't it? Well, it did cause a financial crisis.
❝ Ask anyone on the street cognizant of the neutral interest rate concept, and everybody agrees that it can't be measured, it can't be seen, there's no way to know what it is.
❝ I want to be clear about my view that you shouldn't let politics get in the way of investing, don't let your personal politics affect your investment decisions. If you're a conservative or a progressive, it's pretty easy to get pretty depressed if the government is not to your liking. And we've seen a lot of that, but we've also seen that the stock market has basically gone up through thick and thin.
❝ China is clearly an important economic player. It'll remain important. But in some ways, it's like a bigger version of Japan.
Closing Thoughts
I think you see why speaking with Ed Yardeni—who is also a tech enthusiast—was so much fun, so positive, and so enlightening, all at the same time.
Many thanks to Ed Yardeni for joining me for this podcast, and to all the people behind the scenes who make econVue possible, especially our producer, Sam Fu.
For new listeners, econVue is a home for independent voices and expert analysis of critical global economic issues. Our publication and website have both just moved to Substack, and so far, so good! You can also find The Hale Report on Spotify and Apple Podcasts. To support our work and receive notifications about new podcasts and articles, please subscribe:
This podcast is dedicated to the Three Ed’s. You know who you are.
📍Chicago
Share this post