Wall Street strategist Ed Yardeni said US stocks could surge to new highs thanks to last week's sharp interest rate cut by the Federal Reserve, but could also lead to a return to inflation if Fed officials are not careful. The latest policy decision raises the probability of a "complete meltdown" in equity prices - as the S & P 500 surged 220 per cent from 1995 to the end of the last century during the dotcom bubble - from 20 per cent to 30 per cent. He puts the probability of a bull market at 80 per cent, with the other 20 per cent similar to the 1970s, when global stock markets were rattled by inflation and geopolitical tensions. But if things start to overheat, there are broader risks. " If they let the economy overheat and create a bubble in the stock market, then they will create some problems, "said the founder of Yardeni Research Inc., adding that the Fed was ignoring the upcoming US Presidential Election, while both candidates presented policy scenarios that could spark inflation.