Wharton professor Jeremy Siegel roasts Jerome Powell as the Fed continues to signal more rate hikes despite signs of falling inflation: 'I don't know what planet he lives on'

Siegel did not criticize Powell in an interview with CNBC on Friday.

Powell's continued resolve to hike interest rates despite evidence that inflation is coming down is a problem. The Fed is expected to raise interest rates by at least 25 basis points early next year.

"Powell said that despite the tighter policy and slower growth, we have not seen clear progress on slowing inflation," Siegel said. I don't know what planet Scott is on.

Siegel pointed to falling home prices, a decline in housing rents, and a drop below 50 on the ISM index as signs of slowing inflation. Wages are growing at about 5% a year, but that is still less than the inflation rate.

Workers are not catching up. They're not catching up yet. I don't think it's right that the Fed policy is to crush wages so they go back down to 2% so that workers don't catch up to inflation. Siegel said that the policy was insane.

The Fed's quantitative easing actions in 2020 and 2021 are primarily responsible for driving inflation, according to Siegel.

I'm a big critic of the Fed. The Fed is talking to the worker as if they are not going to allow them to catch up to the inflation that they caused. I think that is a slap in the face to the American worker. I don't think that's right. Is that the best public policy? Siegel wanted to know.

When you replace the lagging components of the report with on-the-ground rental prices and housing prices, inflation is negative.

He said that you have to be forward looking when implementing policy.

Siegel said that investors shouldn't trust the Fed's outlook given how badly they got it wrong last year when they said they weren't going to hike interest rates. The Fed is expected to raise interest rates by 400 basis points this year.

In September of last year, Jay Powell said there would be no increases in Fed funds. In September of last year, this was done. When they increased it how many times do we think they know what's going to happen in three years? It is not possible to say yes. They will be following the data.