Veteran Wall Street investor Ed Yardeni downplayed the imminent recession risk but cautioned that the disappearance of bearish sentiment is a contrarian signal for the bull market’s sustainability. Yardeni emphasized that recent weak economic data has paradoxically boosted stock prices. This is because investors interpret bad economic news as increasing the likelihood of the Federal Reserve lowering interest rates soon. Yardeni stated, “Signs that the Fed might lower the federal funds rate soon have sent stocks soaring, even though those signs were weak economic data.” Yardeni emphasized economic indicators, such as the Citigroup Economic Surprise Index, which dropped to -46.8 on Friday, signaled potential weakness. Although this level is above previous recession lows, it might be heading downward. “We are not convinced that it is leading to a recession that the Fed would need to avert by lowering the federal funds rate,” the veteran ...