Jeremy Siegel Predicts Federal Reserve Will Hike Interest Rates in Upcoming Meeting
Wharton School finance professor Jeremy Siegel expects the Federal Reserve to raise interest rates at its upcoming meeting, despite potential market selloff risks. He argues that maintaining current rates could undermine the credibility of newly appointed Fed Chair Kevin Warsh. Siegel noted that President Donald Trump has publicly advocated for lower rates but believes Warsh will proceed with a hike due to internal pressures within the Federal Open Market Committee (FOMC). Siegel highlighted recent economic indicators, including rising oil prices and long-term Treasury yields near 4.90%, as factors supporting rate hikes. He also pointed out that Governor Christopher Waller's inflation threshold could influence the decision based on upcoming core CPI data. Siegel anticipates an immediate market reaction to a hike but expects eventual recovery as investor confidence in Fed credibility improves. The professor warned of rising gasoline prices, which may pressure consumers this fall and keep stock markets rangebound until the next earnings cycle.
Topics: Federal Reserve inflation interest rates Jeremy Siegel