"Iran strike could actually be a positive"… expert offers a 'bold forecast'

Ed Yardeni: "If the U.S. attack on Iran ends quickly,

it could be positive for the global economy and equities"

S&P 500 target: 7,700 this year

Gold target: $6,000 per troy ounce

A forecast has emerged that the latest U.S. attack on Iran could, if it ends quickly, actually have a positive impact on the global economy and equity markets.

Ed Yardeni, head of Yardeni Research, presented this analysis on the 1st (local time). Yardeni—also known for coining the term "bond vigilantes"—said that "with Iran’s navy effectively neutralized by this U.S. attack, the threat of a closure of the Strait of Hormuz has been significantly reduced," adding that "this is potentially positive from an economic and investment standpoint, in that it could substantially lower geopolitical risk in the Middle East after the war ends." He argued that if oil prices fall after a ceasefire, U.S. inflation and gasoline prices would also decline, which would expand consumer spending and support the global economy and stock markets.

Yardeni presented a "Roaring 2020s" as his base-case scenario with a 60% probability—meaning the 2020s could enter a prolonged boom phase on the back of technological innovation and productivity gains.

He also assessed that the reason there has been no "official" closure of the Strait of Hormuz so far is likely because the U.S. and Israel have neutralized Iran’s navy. He said it is unlikely that the two countries have damaged Iran’s oil production and export facilities, adding that "if it’s a short war, oil prices are likely to fall over the next several months." He also expected this would help bring U.S. consumer inflation down toward the U.S. central bank (Fed)’s 2% target.

Accordingly, he maintained his existing S&P 500 targets: 7,700 by the end of this year and 10,000 by the end of 2029. He also reaffirmed his long-term outlook that the strong expansion of the 2020s could carry into the 2030s as a "Roaring 2030s."

Yardeni said that if Middle East risks ease in the near term, the upswing in gold prices could be capped. He projected a year-end gold price target of $6,000 per troy ounce and $10,000 by 2030.

On the possibility of the U.S. economy "overheating" this year, Yardeni assigned a 20% probability. While the stock market has seen some correction so far this year and froth in artificial intelligence (AI)-related names has eased somewhat, he judged it hard to view this as a structural breakdown.

He also kept the probability of a sharp market selloff at 20%. As the biggest risk factor, he pointed to the U.S. private credit market. Even if Middle East-driven geopolitical risks may ease under a short-war assumption, he warned that the risk of a liquidity squeeze in the private credit market is steadily increasing.

Yardeni, however, emphasized that even if a correction phase emerges, it could instead be a buying opportunity for long-term investors, and that it is unlikely to evolve into a phase that undermines the broader structural growth trend.

New York = Correspondent Park Shin-young nyusos@hankyung.com