The 35% Recession Warning Markets Are Ignoring - ft. Ed Yardeni - Prof G Markets Recap

Podcast: Prof G Markets

Published: 2026-03-20

Duration: 3671

Guests: Ed Yardeni

What Happened

Ed Yardeni, the President of Yardeni Research, raised the probability of a recession this year from 20% to 35%, driven by a weakening U.S. economy and the ongoing impact of geopolitical tensions. The price of oil, hovering around $100 a barrel, is a significant factor, historically linked to economic slowdowns or recessions.

Yardeni highlights concerns in the private credit markets, where retail investors are struggling to exit non-liquid funds. This situation is reminiscent of past credit crunches, often triggered by the Federal Reserve increasing interest rates to combat inflation. Despite these risks, the U.S. economy shows resilience, with GDP at an all-time high and analysts' earnings estimates remaining stable amid geopolitical turmoil.

Technological advancements in artificial intelligence, electric vehicles, and robotics are accelerating, providing a counterbalance to economic threats. VCX by Fundrise introduces a public ticker for private tech companies, allowing average investors to engage in sectors like AI and defense technology. Moreover, the U.S. has achieved energy independence, a stark contrast to the oil shortages of the 1970s.

Geopolitical risks remain a significant market concern, particularly tensions involving China, Taiwan, and Russia. Taiwan's near-monopoly on semiconductor chips adds to the global geopolitical stakes. Meanwhile, the U.S. market, although currently outperforming others, sees signs of capital flows redirecting towards emerging markets.

Ed Yardeni coined the term 'bond vigilante' to describe market forces that increase bond yields in response to irresponsible fiscal policies. U.S. bond yields have remained stable between 4% and 4.5% over the past four years, while Japan's bond market shows rising yields without adverse economic impacts. The U.S. national debt, nearing $40 trillion, raises sustainability concerns.

Yardeni predicts that the S&P 500 could reach 10,000 and gold $10,000 per ounce by 2029, reflecting his long-term optimistic view despite current challenges. The episode concludes by addressing the quest for safe haven assets, with Bitcoin debated as a potential option but criticized for its volatility.

Key Insights