Bloomberg Talks Sep 17, 2026 8 min
With Ed Yardeni, founder of Yardeni Research
Ed Yardeni cut his year-end target for the S&P 500 to 7,900 from 8,400, the highest target on Wall Street, and raised the odds he assigns to a bearish outcome to 30% from 20%.
That is a change of date, not of direction. The 7,900 level still sits above where the index trades now, and the 8,400 call has been pushed out rather than withdrawn.
"I don't think it's likely to happen by the end of the year now. I think it's more likely to happen by the middle of next year."
Ed Yardeni, founder of Yardeni Research, on Bloomberg Talks gave three reasons for moving the date: a war in the Middle East that has escalated, oil back at 100 after a drop to about 80 a few weeks ago, and hedge funds unwinding the borrowing they did in Japan. He still calls the earnings picture great; what he has marked down is the valuation multiple investors will pay for it.
The full segment is covered here so you can skip it.
Here are the 6 takeaways that matter.
Key Takeaways
The 8,400 S&P target moves to the middle of 2027, and 7,900 for year-end still sits above the current index level
Higher-for-longer oil raises the odds that energy inflation reaches core prices, which is what changed his Fed view
The Fed is not one-and-done, and Yardeni expects another one or two increases this year
Iran has an incentive to keep oil elevated into the US midterms, because higher prices work against the sitting Republican majorities
Earnings are fine and the multiple is not — investors have grown shy about paying up, and the AI story has become more questionable
The global bond rout is a carry-trade unwind, and a 50 basis-point surprise from the Bank of Japan would accelerate it He would not buy a long-dated bond in front of that decision
A 10-year Treasury at 5% is a good return on a six- to 12-month view, in his description
1. The Target Moves to 2027
The segment opened on the cut itself. Yardeni said the level had not changed, only the calendar, and that a year that ends at 7,900 is still a strong one.
"7,900 is still obviously above where we are now, so it would still give us an awfully good year of returns." — Ed Yardeni
He listed what had deteriorated since he set the original date: geopolitics, the path of oil, the Fed's likely response, and a bond market he described as concerning. Those four run through the rest of the segment in that order.
2. Oil Back at 100
Asked how much the Middle East explains the other two problems, Yardeni said the market had treated the war as a short one and had been wrong. Oil came back down to about 80 a few weeks ago and has since returned to 100. Higher-for-longer oil, he said, raises the odds that energy costs spill into core inflation, a point he credited to the Bill Dudley interview the show had run earlier.
His argument for why the price stays up is political rather than geological. Iran's leadership was decapitated early in the war and the organization behind it kept fighting, and the US midterms give Tehran a reason to keep the oil price high.
"And so here we are in a situation where we're approaching the midterms, and Iran has a great incentive to create more havoc to keep the price of oil up because they obviously would like Trump to lose his Republican majorities in the House and in the Senate." — Ed Yardeni
That feeds straight into the rate call. Yardeni said this is not a one-and-done Fed, and that another one or two increases this year are likely.
3. Earnings vs. the Multiple
Asked whether oil or rate hikes were doing more of the damage to his targets, Yardeni said it was the combination, and then split the index into its two parts. Earnings are strong, the economy is doing well, and analysts have grown more bullish than he is. The problem sits in what investors will pay for that.
"And as you know, as earnings expectations have increased, and I call it FOMO, a Fabulous Earnings Momentum, the valuation multiple has actually gone down because investors are getting a little bit shy about paying for this remarkable outlook for earnings." — Ed Yardeni
He added that the AI story has become more questionable and is being pushed out in the same way, which matters for the index because the AI names carry high multiples.
4. The Carry Trade Unwind
The second interviewer asked what a messier Bank of Japan would break. Yardeni said the damage is already visible in the coordinated rise in bond yields almost everywhere except China. His explanation is mechanical: hedge funds borrowed in yen at close to zero, converted the proceeds into other currencies, and bought government bonds and other assets around the world. Those positions are being closed, and he said the unwind may not be over.
He also named the irony in it. Treasury Secretary Scott Bessent is pressing Japan to raise rates faster, which strengthens the yen and raises the cost of the borrowing, and both of those push the unwind along.
5. What the BOJ Does Next
Asked where the vulnerability sits, Yardeni pointed at the size of the next Japanese move rather than the direction.
"If they only do a quarter, then I think maybe that'll keep the carry trade from unwinding faster. But if they go and surprise and do 50, that might be more of a shock." — Ed Yardeni
Pressed on whether a more hawkish Bank of Japan means a more vulnerable global bond market, he said yes.
6. Buying the 10-Year
The last question was whether this is a moment to buy long-dated bonds. Yardeni said no, and then separated the timing from the level.
"I do think that looking out six, 12 months or 10 years on a 10-year bond, 5% is going to turn out to be a very good return." — Ed Yardeni
For now he would wait, and he described the 10-year as sitting on the fence around 5%.
Bonus Insights
Yardeni coins his own terms and used one here: FOMO, which in his version stands for Fabulous Earnings Momentum rather than fear of missing out. He also called the bond vigilantes "my friends" and said they have gone wild all around the world, which is his shorthand for bond investors forcing yields higher on governments.
He credited Bloomberg's own earlier interview with former New York Fed president Bill Dudley for the point about energy inflation reaching core prices, rather than claiming it himself.
Yardeni's bullish case rests on earnings he says are still strong, and the thing he marked down is the price investors will pay for them while oil, the Fed and the Japanese carry trade are all working the other way.
Products, Companies & Tools Mentioned
Yardeni Research (His own firm, whose year-end S&P 500 target moved to 7,900 from a Street-high 8,400)
Bank of Japan (A quarter-point move keeps the carry trade unwinding slowly, in his account; 50 basis points would be a shock)
Federal Reserve (Not one-and-done, with another one or two increases likely this year)
US Treasury (Scott Bessent is pressing Japan to raise rates faster, which Yardeni said stimulates the unwind)
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