Bloomberg Talks: Ed Yardeni Talks Year-End Market Rally

Date: November 28, 2025
Host: Paul Sweeney and Tom Sweeney
Guest: Ed Yardeni, President of Yardeni Research

Episode Overview

This episode features a post-Thanksgiving conversation with renowned market strategist Ed Yardeni. The hosts dive deep with Yardeni on the resilience of the U.S. economy, drivers of the current bull market, the impact of technology, and the prospects for markets and monetary policy heading into year-end. With the economy proving robust in the face of persistent challenges and the Fed’s outlook uncertain, Yardeni outlines why he remains optimistic—especially about productivity growth, the “Roaring 2020s,” and the broader market beyond just the “Magnificent Seven” tech stocks.

Key Discussion Points & Insights

1. The Yardeni Approach: Extrapolating the Bull Market

[03:14]

• Resilience of the Economy: Yardeni credits ongoing economic strength primarily to the resilience of consumers, particularly baby boomers, who collectively hold immense wealth and continue to spend and support younger generations.
  • Quote: “I’m seeing all my friends retiring...the baby boomers have $80 trillion of net worth. It’s the wealthiest generation ever to retire.” – Ed Yardeni [03:21]
• Trickle-Down Support: Many retirees assist their adult children financially, helping with mortgages and family expenses, creating a “trickling down” effect that bolsters consumer spending.

2. The Roaring 2020s and Productivity Boom

[04:36]

• Labor Shortages and Technological Solutions: Anticipating baby boomer retirements, Yardeni foresaw tight labor conditions, leading companies to focus on boosting productivity through technology—especially Artificial Intelligence (AI).
  • “AI could be an important technology. Never expected it would just come out of the blue in 2022, but it did.” – Ed Yardeni [04:59]
• Recent GDP Growth: Real GDP up nearly 4% in the last two quarters; productivity gains have offset labor force limitations and helped maintain consumer purchasing power.

3. Nominal GDP, Profits, and Animal Spirits

[06:40]

• Nominal GDP’s Importance: Yardeni, drawing on his Yale economics background, emphasizes nominal GDP as a central driver—fueling both revenue and profits.
  • Quote: “Nominal GDP runs profits, and profits run nominal GDP and runs revenue...” – Ed Yardeni [07:08]
• Productivity as “Fairy Dust”: Enhanced productivity enables higher real GDP and lower inflation while maintaining strong nominal gains—a “magic mix” for markets.
  • “Productivity is like fairy dust. It makes everything better.” – Ed Yardeni [07:29]

4. The Magnificent Seven and Market Concentration

[08:02]

• Dominance of Big Tech: The Magnificent Seven now make up 30% of S&P 500 market cap and roughly 25% of its earnings—reflecting their disproportionate impact.
  • “They have, some of them have moats around them...it’s kind of like Game of Thrones.” – Ed Yardeni [08:03]
• Concentration Risk? Yardeni isn't worried, as these firms generate vast cash flow and are constantly integrating innovation through acquisitions. This does frustrate small- and mid-cap managers, as potential “next Microsofts” get bought out early.
  • “These companies...basically have internal investment banking departments...that they can leverage up in their businesses.” – Ed Yardeni [08:41]

5. Prospects for Small and Mid-Caps; Market Breadth

[09:08]

• Interest Rate Sensitivity: Russell 2000 tends to outperform on expectations of FED easing. However, a large portion lacks earnings.
• Beyond the Big Names: Yardeni prefers the “Impressive 493”—the rest of the S&P 500—believing they will benefit from technology-driven productivity and that market gains will eventually broaden out.

6. Federal Reserve Policy: Confusion and Frustration

[10:04]

• Fed’s Mixed Signals: Yardeni has suggested repeatedly (jokingly) that he could perform the Fed’s job for half the pay, with less confusion.
• Fed “Flying Blind”: The post-pandemic era, with its unique productivity boom, has left the Fed uncertain about the “neutral rate,” as reflected by the wide range in published dot plots.
  • “They have no idea what the neutral rate is. I think you have to look [at] the neutral rate ex post, after the fact.” – Ed Yardeni [11:16]

7. Longevity and the Power of Compounding

[12:03]

• Investment for the Long Haul: Yardeni encourages investors to plan for long lives and harness compound growth.
  • “Spock from Star Trek basically told us ‘live long and prosper.’ And that’s what we’ve been doing...all investors should assume they’re going to live long, and...let the magic of compounding make their retirement prosperous.” – Ed Yardeni [12:07]

8. Lighthearted Moments: Dogs and Thanksgiving

[12:32]

• Personal Touches: The segment wraps up with friendly banter about dogs, the post-Thanksgiving holiday, and even buying doggy sweaters—a signature playful tone to end the show.

Notable Quotes

• “It’s a lot of money...I also see a lot of my friends helping out their adult kids with mortgage down payments...So there’s a lot of trickling down going on.” – Ed Yardeni [03:39]
• “The digital revolution...this could very well be the roaring 2020s. And so far, so good.” – Ed Yardeni [04:18]
• “These companies are earning a lot of money...it’s one of the reasons small and mid-cap managers have been frustrated.” – Ed Yardeni [08:36]
• “My preference is the...impressive 493...there’s 493 companies in the S&P 500...benefiting from what the Magnificent Seven are creating.” – Ed Yardeni [09:29]
• “The Fed really frustrates me...I’d be more than happy to do what the Fed does for half the price...” – Ed Yardeni [10:09]
• “You have to look [at] the neutral rate ex post, after the fact.” – Ed Yardeni [11:16]
• “Live long and prosper...let the magic of compounding make your retirement very, very prosperous.” – Ed Yardeni [12:07]

Timeline of Key Segments

| Timestamp | Topic | |---------------|-----------| | 03:14 | Yardeni on extrapolating the bull market and boomer wealth | | 04:36 | Productivity, labor shortages, and the digital (AI) revolution | | 06:40 | The importance of nominal GDP and productivity “fairy dust” | | 08:02 | Magnificent Seven’s dominance; concentration risk | | 09:16 | Prospects for small/mid-cap stocks and market breadth | | 10:04 | Federal Reserve critique; uncertainty over rates | | 12:03 | Long-term investment advice; power of compounding | | 12:32 | Lighthearted banter about dogs and the holiday |

Tone & Flow

The episode blends analytical rigor with a relaxed, good-humored holiday spirit. Yardeni’s optimism is grounded in historical context, economic fundamentals, and practical experience. The hosts and Yardeni riff effortlessly, toggling between market strategy, economic theory, and witty anecdotes.

For Listeners Who Missed the Episode

• Ed Yardeni remains bullish on the market, anchored by U.S. consumer strength, technological productivity, and his vision for a “Roaring 2020s.”
• He’s not fazed by tech concentration, believing the benefits will ripple to the wider market.
• Despite rate cut expectations, Yardeni critiques the Fed as “flying blind” and urges investors to take the long-term view.
• Memorable for: Clear optimism, economic literacy, playful banter, and some motivational advice for investors young and old.