Jeremy Siegel is a professor of finance at the Wharton School of the University of Pennsylvania. Scott Mlyn/CNBC/NBCU Photo Bank/NBCUniversal via Getty Images
Jeremy Siegel, a Wharton finance professor, said he doesn't believe the Fed's inflation outlook to be "credible."
He believes that the central bank is at risk of reducing its monetary policy soon.
He said that doing so would shock the stock markets in 2022, in a CNBC interview.
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Jeremy Siegel, a Wharton finance professor, said he doesn't believe the Federal Reserve's inflation outlook "credible" and believes that the central bank may reduce its monetary policy sooner rather than anticipated.
He told CNBC Friday that this would shock the stock markets in the early 2022.
"I don't believe these inflation forecasts the Fed has put," he stated, referring specifically to the central bank’s 4.2% target for this year and its 2.2% goal next year. "We will have more inflation."
He said, "When you see worsening inflation, the Fed will be under pressure and that's going going to disturb market and that's down."
Siegel said that the US economy could expect "a few more" poor consumer price index reports towards year's end. He said that the Fed would continue with its program in the coming months. However, the road ahead looks clear.
CNBC's Siegel stated that Powell opened the door by saying, "If things get worse, then we will have to taper faster." "If this happens towards the end of the calendar year, it would shake the market."
Siegel called for more aggressive central bank action to contain inflation. However, he noted that the Fed cannot do much to control rising prices. He noted that trying to do this will "trouble the market" and the economy.
"I worry about overreaction." CNBC's Siegel stated that a lot of the inflation we're going through, I believe, is already in the pipeline. "The Fed cannot really do anything about this."
According to the Federal Open Market Committee meeting, tapering asset purchases could be "soon" justified. Half of Fed officials anticipate the first rate increase to occur by next year.
