from Alessandra Caparello
The market is not ready for a U-turn on Fed policy. So Jeremy Siegel at Wharton that the tipping point for dealing with hot inflation will come from a drastic change in Federal Reserve policy. “If the Fed suddenly gets tougher, I’m not sure the market will be ready for a U-turn [il presidente] Jerome Powell could catch if another bad inflation report arrives, ”so the Wharton finance professor at Cnbc, indicating that in that case“ a correction will come ”.
Fed guilty helpless
The consumer price index rose 6.2% in October, marking the largest increase in more than 30 years and Siegel criticizes the Fed for being far behind in terms of anti-inflation actions.
“In general, since the Fed hasn’t made any aggressive moves, money is still flowing into the market,” Siegel said. “The Fed is still doing quantitative easing.” The professor speculates that the moment of truth will occur at the Fed policy meeting from 14 to 15 December. If a more aggressive approach emerges to contain the price increase, Siegel warns that there may be a correction. But despite his concern, Siegel still invests in stocks.
“I’m still fully invested because, you know, there is no alternative,” he said. “Bonds are, in my opinion, getting worse and worse. Cash is disappearing at the inflation rate which is over 6%, and I think it is going higher ”. Siegel expects the price increase to extend over several years, with inflation reaching 20% -25% cumulatively.
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