Ed Yardeni: There's no need to cut rates, the economy is doing fine

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S&P500이 5,000 근접, 생산성 급증으로 '포효하는 2020년대' 시나리오 지지. 현재 과열(Euphoria)보다는 합리적 열광 단계로 진단하며, 1999년식 거품 신호(IPO 급증, 적자 기업 열풍)는 아직 없다고 봄. 미국 경기는 중국·유럽 침체 속에서도 견조하고 인플레이션은 실업률 상승 없이 하락 중. 금리는 정상화되어 있어 연준의 인하 필요성은 낮다고 주장.

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01. the S&P 500 closing in on 5,000 for more let's bring in Ed yard Deni of yard Deni research Ed it's so good to talk to you your thoughts your thoughts as we close in on History well yeah I mean Happy Days Are Here Again as they said in the 1920s uh this is the 2020s and my roaring 2020 scenario is almost on steroids here I've been at last year I was talking about 4600 by the end of last year we got there by July this year I've been talking about 5400 and here by the end of this year and we're already at 5,000 so uh it's been phenomenal yeah I mean it didn't end very well that's when when you talk about the 1920s did it and there some there are some suggesting I'm sorry there are decade I'm sorry to talk over you Ed yeah go ahead I was just going to say there there are some who are suggesting that we're repeating one of these type periods here that there's just too much Euphoria thinking that it's just going to go go on forever in a very small number of names well I agree with what Aaron and Josh were pointing out um I would add that the productivity numbers have been awesome uh I've been expecting the productivity growth uh boom this decade and it uh I think it's already started it started last year we had better than much better than expected productivity numbers during the last three quarters of last year productivity is up 2.7% and that's like fairy dust productivity allows the economy to grow faster it keeps inflation down allows wages to rise faster than price prices and it's great for profit margins and profits but you're the one who used the word Euphoria in recent notes not necessarily suggesting that it was here today but that the early signs of it were starting to be present can you explain well it's it's really more exuberance and the question is is it rational or irrational um I was saying that uh the alternatives to the Roaring 2020s is something like the 1990s where we get irrational exuberance and things move too quickly and there are similarities in what we're seeing here in terms of the concentration in Tech but remember back in the late 1990s a lot of tech really didn't have earnings and not only that but a lot of tech was rigging their um sales with the seller financing it's particularly in the uh telecommunications area this time around the earnings are real these companies that are doing well don't depend very much on on debt uh and they've got what it takes to deliver for investors hey Ed it's Josh good to see you uh I was going to say there are a lot of signs that were not at Euphoria at least not yet for starters Americans put a trillion dollars into money market funds last year most of that if not none of that has has come out yet that's not Euphoria how many IPOs did we have uh last year four seven I feel like I can count them that's not quite Euphoria no IPOs this year yet either wor speaking of um those are two of the things just off the top of my head that you would say would be very inconsistent with this idea that it's 1999 and to your point I was around Michael Santo was around we saw the types of deals that were coming out forget about earnings they didn't have revenues they ex they were worse than the 2021 Spa vintage so this is this is not that is you know we will we might get there if this keeps up we just we haven't gotten there yet I think it's rational exuberance so far and I think it's justified by the performance of the economy and by the way on a global basis we really stand out China's in a recession Europe is in a recession um you know the the world isn't looking too good Meanwhile we're doing remarkably well inflation's come down without a recession here because China's had the recession so all in all the US uh is benefiting from a lot of the developments on a global basis and even though the geopolitical situation is just down right awful we haven't seen its impact so far on the price of uh of oil if we suddenly see the price of oil going up ask me to come on again and I'll I'll be concerned about the 1970s all over again what if we're doing too well though and that prohibits the fed from cutting rates when the market wants because you've got the labor market still too strong and GDP prints that are going to shock people well I I have no problem at all with the unemployment rate remaining below 4% I know some fed officials uh previously said that they like to see the unemployment rate above 4% in order to bring inflation down but much to their surprise not to mine quite honestly uh we've been able to see inflation coming down without unemployment going up and that's because productivity is making a comeback look I I have not been in the camp that uh has been rooting for or expecting that the fed's going to give us five six seven rate Cuts this year because I've not been in the recession Camp I have been in the disinflation camp but I I think interest rates have normalized they're back to where they should be I don't really think we need to cut rates the economy is doing just fine