Wharton professor Jeremy Siegel says the stock market has bottomed and bond yields have peaked with the Fed likely to stop tightening soon

The stock market won't retest its bottom because bond yields have probably peaked, according to a Wharton professor.

The data that is so closely tracked by the Federal Reserve shows that on-the-ground inflation is easing. Interest rate hikes are likely to be less.

In December, they're probably going to go 50 basis points. Siegel thinks the day of recognition is sooner than if he were there.

The pendulum has moved too far. Inflation was underestimated for a long time. The facts have to be faced by the Fed Chair.

There are signs that inflation is starting to ease. The October inflation report showed a year-over-year gain of 7.7%, below expectations for a gain of 7.9% and a drop from June's peak.

The producer price index rose just 2% in October, less than the 0.4% predicted by the economists. The year-over-year gain in the PPI was less than it was in March.

Siegel, who has been critical of the Fed's reliance on lagging economic data, believes that inflation is over when you use current housing data.

There are two housing indexes, one of which is forward looking and the other of which is backward looking. He said that he liked the backwards looking one better. Siegel said "Oh my God"

He was not impressed with the Fed's focus on reining in the labor market and squashing wage growth since wages haven't kept up with inflation.

Too much attention is given to the labor market. The wage is going down. The workers are trying to catch up. When wages have gone up less than inflation, I don't think that is cause to push inflation. The Fed is focused on wages now.

He predicted that the stock market would increase in value over the next two years.

Siegel described the market as coiled up and waiting for the Fed to say that inflation has been solved.