Wharton professor Jeremy Siegel has been vocal about his hatred for the Federal Reserve’s aggressive interest rate hikes in its quest to quell inflation and worries that the central bank is making the biggest mistake in the history of the bank and may provoke a deep recession.
That’s because, according to Siegel, inflation is starting to come down significantly, but the Fed is still aggressive 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 hiked interest rates by another 75 basis points and said that there might be 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.
