Jeremy Siegel, professor of finance at the Wharton School of the University of Pennsylvania.
Scott Mlyn/CNBC/NBCU Photo Bank/NBCUniversal via Getty Images
The Fed is making the same exact mistake it made a year ago, and possibly the biggest mistake in its history.
That’s according to Jeremy Siegel, who criticized the Fed’s inability to recognize inflation is coming easing.
“It makes absolutely no sense to me whatsoever, way too tight!” Siegel said.
Wharton professor Jeremy Siegel has a big issue with the Federal Reserve’s aggressive interest rate hikes in its bid to tame inflation, and worries that the central bank is making the biggest mistake in its history and may provoke a steep recession.
That’s because, according to Siegel, inflation is starting to come down significantly and the Fed is still moving forward with its rate hikes.
“The last two years [are] one of the biggest policy mistakes in the 110-year history of the Fed, by staying so easy when everything was booming,” Siegel said.
On Wednesday, the Fed raised interest rates by another 75 basis points and said that it expects further rate hikes heading into early 2023, according to its updated dot plot.
“When we have all commodities going up at rapid rates, Chairman Powell and the Fed said: ‘we don’t see any inflation. We see no need to raise interest rates in 2022.’ Now when all those very same commodities and asset prices are going down, he says: ‘Stubborn inflation that requires the Fed to stay tight all the way through 2023.’ It makes absolutely no sense to me whatsoever, way too tight!” Siegel said in an interview with CNBC on Friday.
Siegel pointed out that oil prices have fallen back to levels not seen since the start of 2022, prior to Russia’s invasion of Ukraine, and home prices and home building activity are …read more
Source:: Business Insider