Beyond precious metals, Yardeni also pointed to a structural boost for base metals such as copper, tin, lead, and aluminium, as a more dangerous world is likely to necessitate higher defence spending and infrastructure outlays.
This bullish view on metals comes against the backdrop of escalating geopolitical tensions triggered by Donald Trump’s recent threat of imposing 10% tariffs on Greenland, potentially rising to 25%. While acknowledging the seriousness of the development, Yardeni described it as “not happy at all,” warning that it raises troubling questions about the United States’ commitment to North Atlantic Treaty Organisation (NATO), especially amid the ongoing Russia-Ukraine conflict.
He cautioned that such moves could embolden China to adopt a tit for tat approach. “I think it increases the possibilities that China will decide now is a good time to at least put a blockade around Taiwan,” he said, calling the broader geopolitical landscape “very messy and dangerous.”
Despite these risks, Yardeni observed that financial markets have remained surprisingly resilient. He attributed this to investor familiarity with Trump-era tariff threats, which he likened to Swiss cheese due to the numerous exemptions that ultimately diluted their impact.
“The markets at this point are kind of taking the view that this too shall pass,” he said, adding that he doubts the new tariffs will eventually be implemented.
On portfolio strategy, Yardeni recommended a diversified mix of stocks and precious metals, while expressing caution on bonds in the current environment. He also highlighted a key shift underway in the US equity market, with performance broadening beyond the ‘Magnificent 7’ technology giants. According to Yardeni, rising competition among these mega-cap companies is likely to compress margins and lead to future disappointments. He believes investor attention is gradually moving towards what he calls the “Impressive 493” — the rest of the S&P 500.
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Turning to US-India relations, Yardeni said that while the current relationship is “not very good,” it could improve “in a heartbeat.” He cited ongoing trade negotiations and high-level diplomatic engagement, including Prime Minister Narendra Modi’s invitation to a peace board for Gaza, as encouraging signals. Describing Trump’s style as similar to “New York’s real estate negotiations” — very noisy but ultimately deal-oriented — Yardeni expressed optimism that a compromise with India will eventually be reached.
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For the entire interview, watch the accompanying video
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