The Market Could Rally 30% Next Year, Says Wharton Professor Jeremy Siegel

Jeremy Siegel
Jeremy Siegel

Fears that the Fed will further hike rates too high is what’s keeping stock prices in decline, according to Wharton professor Jeremy Siegel, who predicted a massive rally next year as policy won’t be as tight.

“I’m staying put,” he said of his outlook for US stocks in an interview with Bloomberg TV on Friday. “I certainly wouldn’t be surprised if a year, year and a half from now we’re 20% to 30% higher. I think stocks are undervalued greatly in the long run.”

Siegel took a bullish stance on the market, although other experts on Wall Street have cautioned of a recession and a possible market crash. That’s mainly because the Fed has said they will continue to hike rates to tame inflation – but that pressure toward the downside could soon ease, as inflation-leading indicators are plummeting rapidly, Siegel said.

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Previously, he pointed to falling housing prices, which make up 40% of the Consumer Price Index and lag behind the official statistics by about 18 months. That means while inflation remains sky-high at 8.2%, inflationary pressures may be much milder than they appear on the surface, which could bring much-needed buoyancy to the stocks.