Ed Yardeni Raises Odds of 'Melt-Up' in Stocks to 30% After Fed's Rate Cut Last Week

Ed Yardeni, president at Yardeni Research, has raised the probability of an 'outright melt-up' in US stocks following the Federal Reserve's recent 50 basis-point interest rate cut last week. Yardeni believes the aggressive rate cut, which aims to stimulate the economy, could drive stock prices to new highs. However, he also warns that this policy could lead to inflation if not managed carefully. The comparison is made to the dot-com bubble when the S&P 500 surged 220% from 1995 to 2000. Yardeni has increased the odds of a significant rise in equity prices to 30% from 20%. He also noted the risk of 'overheating a warm economy.'