Wall Street veteran Ed Yardeni is growing more pessimistic about the state of the economy and, consequently, less optimistic on his stock market outlook. The head of Yardeni Research on Wednesday raised his chance of recession to 40% through next year, from 30% previously, on concerns that "we could talk ourselves into one." At the same time, he cut has forecast for the S & P 500. His new price target is a range of 3,825 to 4,335, a cut from the previous 4,200 to 5,000. That means Yardeni sees the index declining 3% in a worst-case scenario and rising 10% in the best case, based on Tuesday's closing price. "We are raising the odds of a recession because of rapidly spreading pessimism about the economic outlook," Yardeni wrote in his daily market report. "We could all talk ourselves into a recession. If a recession is about to happen, it will be the most widely anticipated downturn in history." The big difference he sees this year in comparison to prior market downturns is that the market no longer can count on the Federal Reserve to step in and halt the carnage. Major indexes have posted steep declines since peaking late in 2021 and early this year, with the Nasdaq well into bear market territory. Fed officials have repeatedly stated their primary mission is halting runaway inflation, stressing that financial conditions, including stock prices , need to tighten for prices overall to come down. "So the Fed Put is kaput," Yardeni said. "This explains the market downdraft so far this year, which is cutting deeper and lasting longer than a typical panic attack. But this one won't end until inflation moderates significantly all by itself or with the help of a Fed-induced recession either by design or by accident." Yardeni added that he still thinks the U.S. could skirt recession as inflation moderates through the year and reduces the need for draconian Fed actions. However, he said consumer and business confidence will be important influencers in which way things go. Markets will be watching later Wednesday when the Fed releases minutes from its meeting earlier this month during which it raised benchmark interest rates by 50 basis points. The minutes will provide more insight into the thinking behind that move and how policymakers feel about the future direction of policy.