Does President Donald Trump's Tariff and Trade Policy Have America on a Collision Course With Stagflation?

At any given time, there are one or more significant market headwinds threatening to drive the benchmark S 500 (SNPINDEX: ^GSPC), iconic Dow Jones Industrial Average (DJINDICES: ^DJI), and innovation-inspired Nasdaq Composite (NASDAQINDEX: ^IXIC) lower.

For instance, the S 500's Shiller Price-to-Earnings Ratio, which is based on average inflation-adjusted earnings over the prior 10 years, recently achieved a closing multiple of almost 39. This makes the current bull market the third-priciest when back-tested 154 years. Historically speaking, when valuations get extended to the upside, the S 500, Dow Jones, and/or Nasdaq Composite eventually fall 20%, or considerably more.

For Federal Reserve Chair Jerome Powell and the nation's central bank, these correlative events and historical headwinds aren't of much concern -- but there is one exception.

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Source Fool.com