Stocks will soar, house prices will crash and Fed rate hikes could drag the US economy down, said Wharton professor Jeremy Siegel. Here are his 8 best quotes from a new interview.

jeremy siegel

Jeremy Siegel.Steve Marcus/Reuters

  • Jeremy Siegel sees stocks soaring 30% in two years and house prices falling 15% from their peak.

  • The Fed initially ignored the inflationary threat, and now it’s raising rates too quickly, he said.

  • Siegel warned that the Fed’s war on inflation was increasing the risk of a US recession.

US stocks will rise 30% over the next two years and house prices will fall as much as 15% from their peak, Jeremy Siegel predicted on Bloomberg’s “Masters in Business” podcast this week.

The Wharton professor and author of ‘Stocks for the Long Run’ also sounded the recession alarm and lambasted the Federal Reserve for first ignoring the threat of inflation, then overdoing it with its rate hikes. ‘interest.

Here are Siegel’s 8 best quotes, slightly edited for length and clarity:

1. “After two years, the stock market will be 20% to 30% higher than it is today.”

2. “Stocks are pretty undervalued. If you buy stocks, in a few years you will be very happy.”

3. “If you have this long horizon and you are young today is a golden time. You are not buying high. You are buying near the low. You are going to be guaranteed good returns when you retire.”

4. “Just holding these rates until 2023 will result in the second-worst housing market crash in the post-war period. House prices, from their peak, will drop 10% to 15 %. If they keep going higher, it’s going to get even worse.” (Siegel was referring to the Fed’s rate hike from near zero to a 3.75% to 4% range since March, and signaling that further hikes are ahead.)

5. “The fact that they didn’t start pivoting until November 2021, and didn’t start doing anything until March 2022, is unforgivable. It’s gross negligence in as the guardian of our monetary system.”

6. “They blew up the money supply in 2020. When did we really start seeing inflation? Late 2021. Now we’re only six months into the tightening cycle. And they say, ‘Oh my God, it’s not working.'”…It’s not working. You have to keep walking.” I’m flabbergasted.”

7. “The longer they continue down this path, whether we keep marching or we’re going to stay high longer, a recession becomes a real possibility. I still think they have a chance of avoiding one.”

8. “What scares the market so much is that there seems to be no limit to their talk: walk, walk, walk, walk, walk. Because if they wait for inflation to come down to 2% per year, we are in a big dip.”

Read more: Goldman Sachs: These 24 cheap stocks have strong dividend growth and double the yield of the typical stock – and should outperform in a recession

Read the original article on Business Insider

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