Trump’s Tariff Policies Raise Stagflation Concerns Amid Market Valuations
Market headwinds loom as the S&P 500's Shiller P/E ratio nears historic highs, signaling potential overvaluation. The Dow Jones and Nasdaq Composite face similar risks, with extended valuations often preceding sharp corrections.
Federal Reserve Chair Jerome Powell remains wary of stagflation—a toxic mix of rising inflation, sluggish growth, and unemployment. While not in panic mode, the Fed grows increasingly uneasy as Trump's aggressive tariff policies amplify economic uncertainties.
Equities face a precarious balance. The specter of stagflation could disrupt the current bull market, forcing investors to reassess risk exposure. Cryptocurrencies may benefit as hedges against traditional market volatility, though regulatory scrutiny remains a wildcard.
