Former President Trump anticipated a 20-25% market decline due to Iran conflict, a scenario still possible amid inflation and Fed policy risks.
Former President Donald Trump previously stated he expected the Iran war to drive the Dow Jones, S&P 500, and Nasdaq down 20% to 25%. Markets have since hit record highs despite geopolitical tensions and elevated inflation, defying his forecast so far.
Recent all-time highs for major indices occurred with trailing 12-month inflation above the Federal Reserve’s 2% target and ongoing conflict in Iran. The Strait of Hormuz closure in February heightened concerns over inflationary pressures, potentially forcing the Fed to act.
While equities have shrugged off risks, lingering inflation and geopolitical uncertainty could still trigger a correction, aligning with Trump’s earlier prediction.