Asks why the typical 'buy the dip' sentiment indicator might not work this time during the Middle East crisis.
Jonathan Ferro
Ed Yardeni
In past crises, there was a clear policy response (Fed/Treasury put) that could relieve concerns. This time, it's ambiguous who is in control and how it gets resolved.
Ed Yardeni
Market resilience is explained by recession concerns weighing on forward P/E, while analysts keep raising earnings expectations, not factoring in the Middle East problem.
Asks if a hawkish Fed tone today, given the potential stagflationary shock, could create real downside by introducing more credit market cracks.
Lisa Abramowicz
Ed Yardeni
Wishes the Fed would state plainly that monetary policy can't solve a geopolitical shock; raising rates won't make energy/food inflation go away and would weaken the labor market.
Ed Yardeni
Predicts the Fed will likely give a toned-down version of that, saying they are data-dependent and will wait to see how it plays out.