Ed Yardeni: Inflation (Hopefully) has Peaked

As longtime investment strategist Ed Yardeni set to begin 2026, he was already thinking about the year’s second quarter. He offered a measured outlook: slower inflation, steady growth, and lingering uncertainty tied to Washington and global trade.

Yardeni, President of Yardeni Research, has been a highly sought-after analyst on CNBC, Bloomberg Television, Fox Business, and the Wall Street Journal. His insight on global investment strategies is formed by deep dives into finance, public policy, and politics.

But he clarified his role as he talked with American Farmland Owner.

“Look, I'm not running policymaking in Washington. It's not my job to offer policy prescriptions,” Yardeni said. “I'm an investment strategist, and I try to say what are the implications of what Washington is doing, and what are the implications, what geopolitical developments are happening.”

In other words, rather than predicting what policymakers should do, he focuses on how their actions ripple through markets, consumers, and businesses.

That distinction matters as agriculture heads into planting and early growing season in Q2. Policy decisions — particularly tariffs — have played an outsized role in shaping input costs, commodity markets, and consumer prices. Public sentiment, too.

Tariff Impact on Second Quarter

Farmland and ranch owners are thinking what American consumers are asking, “Have we already felt the full impact of tariffs?”

And if businesses absorbed most of the additional tariff costs in the final months of 2025, will they start passing along more of those increased prices to consumers in the first six months of 2026?

“It's possible, you know, I won't say it's wrong, it's possible,” Yardeni said.

The non-partisan Tax Foundation found that the average American household paid an additional $1,000 in taxes due to President Donald Trump’s increased tariffs. And households should expect to pay an additional $1,300 in additional taxes due to tariffs in 2026, the Tax Foundation analysis found.

The Kiel Institute for the World Economy, based in Berlin, found that foreign exporters pay just 4% of Trump’s higher tariffs, while American businesses and consumers pay the other 96%.

RELATED: Economist Dr. Ernie Goss traced what is behind a drop for 10 straight months in the manufacturing sector. 

Yardeni is also following the data behind the Consumer Price Index. “The CPI, the Consumer Price Index, has three components, big components, and that is services, non-durables, which is food and energy, and a few others. And then, of course, it's got durable goods,” he said.

Durable Goods in Rural America

For rural America, durable goods — everything from machinery to vehicles — are particularly important. According to Yardeni, “When you look at the three of them, what you clearly see is that durable goods inflation did pick up this year, and I think you can definitely attribute that to the tariffs.”

That increase has been noticeable in equipment markets, where higher prices for steel-intensive and imported components have filtered into final costs. For landowners considering capital expenditures, that trend bears watching. Yet Yardeni does not expect it to spiral.

“I’m thinking that this will be fairly transitory, and then we will see durable goods inflation moderate,” he said.

Part of that moderation may stem from global adjustments already underway. “It looks as though China is eating some of the tariffs,” Yardeni explained.

He pointed to deflation in China’s Producer Price Index as 2025 came to close. That was evidence that exporters there may be cutting prices to offset tariff impacts. “They may be lowering their prices to kind of offset the impact of the tariffs,” Yardeni speculated.

Additionally, global supply chains are adapting. “It’s a big world out there,” Yardeni noted, highlighting that some Chinese production has shifted to countries like Vietnam and Mexico.

Those adjustments could ease upward pressure on imported goods and help stabilize prices in the U.S.

For agriculture, this could mean fewer inflation shocks in Q2 than some feared late last year. Lower durable goods inflation would help relieve pressure on machinery, irrigation systems, and other capital investments. Meanwhile, food and energy — key components of non-durables — remain critical variables, but Yardeni’s broader outlook suggests easing price growth overall.

“I think inflation’s coming down from here,” he said. “I don’t expect to see it spike back up.”

RELATED: Ed Yardeni told American Farmland Owner how older Americans will play a crucial role in the future as they pass down their wealth.