Wharton School Professor Jeremy Siegel joins ‘Closing Bell’ to discuss whether the stock market should be more worried about the message coming from bonds following the Fed’s latest rate hike this week and more. For access to live and exclusive video from CNBC subscribe to CNBC PRO:
» Subscribe to CNBC TV:
» Subscribe to CNBC:
Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.
Connect with CNBC News Online
Get the latest news:
Follow CNBC on LinkedIn:
Follow CNBC News on Facebook:
Follow CNBC News on Twitter:
Follow CNBC News on Instagram:
#CNBC
#CNBCTV …(read more)
BREAKING: Recession News
LEARN MORE ABOUT: Bank Failures
REVEALED: Best Investment During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
The Federal Reserve’s actions during economic downturns are always scrutinized, and for good reason. Recently, there has been a growing debate regarding the appropriateness of the Fed “projecting” a recession as part of its monetary policy. This issue has come to the forefront due to the recent shift in the Fed’s outlook, which has been described as more “dovish” than in the past.
Jeremy Siegel, a professor of finance at Wharton School of the University of Pennsylvania, has been at the forefront of this debate. In a recent op-ed piece, Siegel argues that projecting a recession as “appropriate monetary policy” could be dangerous and counterproductive.
Siegel argues that the Fed’s role is to maintain price stability and promote full employment, not to forecast recessions or to manipulate market expectations. Moreover, projecting a recession could become a self-fulfilling prophecy. By signaling that a recession is coming, the Fed could cause businesses and consumers to pull back on spending and investment, which could lead to a weaker economy.
Furthermore, Siegel points out that projecting a recession could be interpreted as a lack of confidence in the economy. This could create further uncertainty and damage investor confidence, which could have a negative impact on the financial markets.
There is also the concern that projecting a recession could limit the Fed’s policy options in the future. If the Fed announces that a recession is imminent, it could limit the effectiveness of future monetary policy measures. For example, if the Fed were to cut interest rates in an attempt to stimulate the economy and avoid a recession, it could be perceived as a desperate move that was only necessary because of the Fed’s earlier projections.
Despite these concerns, there are some who argue that projecting a recession is appropriate in certain circumstances. For example, if the Fed believes that a recession is inevitable and that a preemptive strike is necessary to avoid an even worse downturn, then projecting a recession could be seen as a necessary evil.
Regardless of which side of the debate you fall on, it is clear that projecting a recession is a complicated and potentially dangerous move. It is important for the Fed to carefully consider its actions and avoid doing anything that could harm the economy or undermine confidence in the financial markets. Ultimately, the goal of the Fed should be to promote long-term economic growth and stability, while also working to mitigate the negative impacts of economic downturns.
We had little to zero inflation for over a decade.
The problem with Powell is he doesn't listen to the professor.
It is a government inspired crisis this time. The Treasury have to sell Bonds to cover the trade imbalance and the government spending imbalance. In order to sell them they have to raise interest rates and the old long-term, low risk, low interest, AAA investments (including Treasury Bonds), held by the banks (often due to government regulatory policy), become next to worthless. The next milestone is the 15th when the government issue a new batch of Bonds. I have approximately $350k stagnant in my port_folio that needs growth. What is the best way to take advantage of this downturn?
I still blame the FED for this, because in the end they benefit by either buying off the failed banks cheaper or something. The fed can print credit as long as someone will borrow it into existence, but they cannot print product (or production).
As recession fears mount on Wall Street and inflation remains well above the Fed's 2% target, some of the top commentators in markets, business, and economists have been sounding off on just how bad they think the next downturn might be — and how far stocks may have to fall. I need ideas and advice on what investments to make to set myself up for retirement, my goal is to have a portfolio of at least $850k at the age of 60.
how can they project inflation as appropriate monetary policy? It's the boy who cried wolf vs the boy who cried sheep arguing about what lie is the best. It's the next logical step. If the sheep get eaten because you cried wolf, you start crying sheep so that no one notices the sheep are missing. It's scary because people are reading Oprah's the secret. They have magical thinking. they even believe in war that just good news or positive thinking is what effects the outcome. That's called irrational.
I really feel left aside hearing and seeing several testimonies from people on profits they make from Bitcoin/Forex Investment. Can someone recommend a good expert that trade on my behalf and generate profit for me.
Is this creature a real economy professor or just a low interest rate cheerleader ?
Mr. Siegel, Given where we are with inflation–what would you do?
In parallel with escalation in the recent years, the recession is now the 'most likely output for the economy' and i cannot imagine being a victim of circumstances, my portfolio got a big hit, holding it further wont be any good, ive heard of people acquring hundreds of thousand even on red seasons, how can I certify this?
https://youtu.be/Md6rrU3o0ag
A perfect storm is brewing in the United States. Inflation, bank collapse, severe drought in the agricultural belt, recession, food shortages, diesel fuel and heating oil shortages, baby formula shortages, available automobile shortages and prices, the price of living place. <It's all coming together and it could lead to a real disaster towards the end of this year (or sooner). With inflation currently at about 6%, my primary concern is how to maximize my savings/retirement fund of about $300k which has been sitting duck since forever with zero to no gains
Powell knows by raising interest the fastest in history they would cause a criss they want that to bring down inflation faster
The fed is trying to stop inflation and the effects It’ll have on everyday Americans. Billionaires are trying to convince regular Americans that the fed is wrong and making mistakes. Where was this talk when the fed was printing money aside from Elon who I believe actually called out the fed in both situations.
Yeah markets haven't been deeming the Fed's guidance that they will maintain high rates regardless of swelling debt costs in order to control inflation as credible. I woulld underweight stocks for a little as the market begins to correct because honestly I still think stock prices are massively inflated at the moment. I have approximately $550k stagnant in my port_folio that needs growth. What is the best way to take advantage of this downturn?
This is no news flash. The Feds job is to control inflation. To do that you have to slow the economy. That inevitably leads to recession. We can only hope it's a mild one.
New highs in 2024 with tech leading the way
In the "Recession Joe Biden" economy local businesses are feeling the pressure from higher food prices – seeing them double, sometimes triple what they used to be. Just another let's go Brandon moment
Everything’s fine. Buy stocks.
I think what te FED is doing is incomprehensible and suicide. 3.5% inflation would be an achievement already after all that money printing.
While the Fed raises short-term rates, and the market lowers long-term rates, banks are caught having to pay high short rates to depositors, while investing at low long rates. This is a formula for more distress in the banking sector. Can the Fed not see this?
Pump more, SP to 4800,Yeah!
If powell holds rates. Economy slowly gets worse and worse. While inflation slowly goes away. A recession is the only way now. To lower inflation. Government cannot afford higher rates.
Every 1% in inflation is like $320 billion in extra costs to government in interest on debt.
With a soft landing, just gonna stagflate. More job loss, with higher inflation. And negative gdp.
Money is drying up… without more stimulus, just gonna slowly wither
This is what happens when corrupt politicians change the definition of recession and naive voters believe them !!
America is currently plagued by the hydra-headed evil duo of inflation and recession. The worst part about this recession is that consumers are racking up credit card debt. In April alone, credit card debt went up 20% while rates have doubled in a year. Inflation is so high that consumers are literally taking debt for basic life necessities. Collapse has indeed begun..
The truth is, with the recent economy. Everyone needs more than their salary to be financially stable. The best thing to do with your money is to invest it properly, because money left for savings always ends up being used with no return….
Siegel should replace Powell, and Yellen should be fired. This would calm markets.
Rates aren’t even 5% and people are panicking. If the Fed reverses course inflation will get much worse
The more I see these old as mf disagree with what the fed is doing the more I agree with the fed.
For the Fed which has 400 PHDs, it turns out that the solution to this inflationary problem is a leaf from the Austrian School, i.e. just let creative destruction take place and the economy will self-correct.
Jezza Seagull swoops in to the rescue.
Given the situation, I think we need to start seeing videos on "How to survive the present recession." In reality, it's a total failure. I was amazed that some people could still make more than $408k in a short amount of time. If that's still the situation, could someone explain how?
Oil price spike? Nope! No recession.
Watch oil price.
With full employment and a good economy is silly to have inflation at 2%, we are good even at 3/4%. Only idiots can be so narrow minded
Thank you for your videos mate. I will advice traders especially newbies to have orientation of trading before they get involved in it because the market has been unstable, forget predictions and start making a good profit now because future valuations are all speculations and guesses. when news gets bearish start buying. "Keep it simple" That correction was the best thing that happened to me. but all thanks to Grayson Miles for his amazing skills for help me to earn 7 BTC through trading chart..
This recession is most likely the result of an external factor. For the first time in decades, the United States is losing its clout as a federal reserve currency. No more manipulation of other economies in order to control inflation. Sure is obvious that a new multilateral world order is in the works.
Don't take your eyes off the PRIZE ….. no matter what the distractions maybe be around you. UNDERSTAND YOUR PURPOSE, I went from living an average life to making over 63k per month. It's amazing. The financial markets are full with opportunities, but I've learned a lot over the past few years to doubt that. The key is knowing where to focus. Well appreciated, Rodger Michael Karl.