{"id":75539,"date":"2024-08-05T14:00:11","date_gmt":"2024-08-05T14:00:11","guid":{"rendered":"http:\/\/guid_108016102"},"modified":"2024-08-05T14:00:11","modified_gmt":"2024-08-05T14:00:11","slug":"whartons-jeremy-siegel-says-fed-needs-to-make-an-emergency-rate-cut","status":"publish","type":"post","link":"https:\/\/wp.timesamerica.net\/whartons-jeremy-siegel-says-fed-needs-to-make-an-emergency-rate-cut\/","title":{"rendered":"Wharton’s Jeremy Siegel says Fed needs to make an emergency rate cut"},"content":{"rendered":"\n
<\/div>\n

<\/span><\/p>\n

<\/div>\n
\n

Wharton’s Jeremey Siegel on Monday called on the Federal Reserve to make an emergency 75 basis-points cut in the federal funds rate after Friday’s disappointing jobs report.<\/p>\n

In addition, there should be “another 75 basis point cut indicated for next month at the September meeting \u2014 and that’s minimum,” Siegel, professor emeritus of finance at University of Pennsylvania’s Wharton School, said on “Squawk Box<\/span>” on Monday.<\/p>\n

<\/div>\n

“The fed funds rate right now should be somewhere between 3.5% and 4%,” he said.<\/p>\n

A basis point is 1\/100th of a percentage point. A move by the Fed between meetings would be unusual, although not unprecedented.<\/p>\n

The Federal Reserve<\/span> kept interest rates at 5.25% to 5.5% after its meeting last week. On Friday, the jobs report<\/span> showed slower growth than expected and an unemployment rate that moved higher to 4.3%, its highest since October 2021.<\/p>\n

That unemployment figure “blew through” the central bank’s target unemployment rate of 4.2%, said Siegel, chief economist at WisdomTree. On top of that, inflation has gone down 90% towards the Fed’s target of 2%, he added.<\/p>\n

“How much have we moved the fed funds rate? Zero,” he said. “That makes absolutely no sense whatsoever.”<\/p>\n

<\/div>\n

Siegel isn’t concerned that an emergency cut will send the markets into a downward spiral. In fact, he thinks the market will welcome the cuts and “rips higher.”<\/p>\n

For instance, Fed Chair Alan Greenspan made an emergency 50 basis-point cut in early 2001 after not cutting at the December 2000 meeting \u2014 and the market rallied sharply, he said.<\/p>\n

“Don’t think that the Fed knows something. \u2026 Since when has the Fed known anything about the economy?” he said. “The market knows so much better than the Fed. They’ve got to respond.”<\/p>\n

If the Fed does not make an emergency cut before September’s meeting, the market will react badly, Siegel predicted. “If they are going to be as slow on the way down as they were on the way up, which by the way was the first policy error in 50 years, then we’re not in for a good time with this economy.”<\/p>\n<\/div>\n

\n
\n
\n
\n

Don\u2019t miss these insights from CNBC PRO<\/h2>\n
\n
    \n
  • Here\u2019s what usually happens to stocks when the Fed cuts rates<\/span><\/li>\n
  • Nvidia could be on the verge of a massive technical sell-off, chart analyst warns<\/span><\/li>\n
  • Fundstrat\u2019s Tom Lee makes another bold call, calling for big rally post-Fed<\/span><\/li>\n
  • The key price support levels to watch as sellers return to Nvidia<\/span><\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
    <\/div>\n","protected":false},"excerpt":{"rendered":"

    Wharton’s Jeremey Siegel on Monday called on the Federal Reserve to make an emergency 75 basis-points cut in the federal funds rate after Friday’s disappointing jobs report. In addition, there should be “another 75 basis point cut indicated for next month at the September meeting \u2014 and that’s minimum,” Siegel, professor emeritus of finance at …<\/p>\n","protected":false},"author":1,"featured_media":75540,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-75539","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bussiness","has-thumb","has-featured"],"_links":{"self":[{"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/posts\/75539"}],"collection":[{"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/comments?post=75539"}],"version-history":[{"count":0,"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/posts\/75539\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/media\/75540"}],"wp:attachment":[{"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/media?parent=75539"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/categories?post=75539"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/tags?post=75539"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}