Siegel: Powell Decided On June Pause
Wharton Professor Jeremy Siegel thinks Jerome Powell has already decided to pause interest rate hikes in June.
Economists warn of recession. One economist has a solution and opinion on the rate outlook. The economist's suggestion is not specified.
Jeremy Siegel, a professor at Wharton, said in an interview with CNBC that the market responded positively to talks of a pause or a skip. The market has experienced a rally.
Siegel said the Federal Reserve may have gone too far with its rate hikes. He warned that the delayed effects of monetary policy may cause a downturn in the second half of the year. He believes that if the Fed hits the brakes now, there may be less chance of a recession.
The Fed's actions depend on information. Siegel said this. He was also surprised by Thomas Jefferson and Patrick Harker. They talked about stopping before the non-farm payrolls data on Friday.
The professor said he found it encouraging that Jerome Powell made a decision with his staff to take a pause. This could mean they agree it's the right time. But, there may be some people who disagree. The professor thinks that Loretta Mester could be one of those people. He thinks there may be a dissenting voice at the next meeting, which hasn't happened in a year and a half.
"He said that the chairman gets what he wants."
Siegel thinks the market will either swoon or surge this summer. He believes the rates are too high for good employment. Siegel thinks there will be a downturn in payroll growth to a negative number sometimes.
The professor said it's scary. The number scares everyone. He added that.
Siegel predicts the market will increase this year. But there won't be a big surge. Siegel thinks artificial intelligence stocks will go up a lot. He says these stocks might keep going up all summer.
The professor from Wharton thinks AI stocks are not bubbles. He thinks this is because the companies behind them are really making money. He explained that a bubble is when a stock is worth four or five times more than it should be. The professor believes AI stocks are not that overpriced.
Want to know what experts say about Nvidia's value? Check out Wharton professor Jeremy Siegel's opinion in our latest blog post. He thinks that nobody can accurately predict how high the shares might soar. Give it a read and stay updated!
The Brookings Institution took a photo that is available on Flickr.
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