"Trumpflation" Is Roiling Wall Street -- and It May Not Be a Short-Term Issue as the President Suggests

Rising "Trumpflation" — driven by President Trump’s tariffs and the Iran-related closure of the Strait of Hormuz — is pushing U.S. trailing 12-month inflation higher and creating downside risk for major equity indexes. Energy supply disruption sent crude and gasoline sharply higher, with consumer fuel costs jumping rapidly, while input tariffs have kept price pressures sticky. A hawkish Fed successor, Kevin Warsh, and the CME FedWatch-implied rising probability of future rate hikes raise the risk that higher rates could slow growth-sensitive parts of the market (notably the AI/data-center boom) and re-price richly valued equities. With valuation metrics elevated (Shiller P/E ~42), the piece warns Wall Street 30 and other indexes face meaningful downside if inflation and rate-hike expectations persist.