Wharton finance professor Jeremy Siegel likes the DOW index larger, favouring the large spherical quantity simply above us at 40,000:
- “We could definitely get it past 40,000”
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“A 10% to 12% rise in stock prices is not out of the question for 2024”
The risk is the Fed:
- “If the Fed is stubborn and says, ‘I’m just going against inflation, even if the data gets soft,’ those figures would have to be adjusted downward…if the Fed keeps money [supply] stagnant, as it has been, you are looking at a recession right in the face. That is why the Fed must ease.”
Siegel says the economy is slowing, and the Fed must recognise that “all its tightness is in the pipeline and will press on the economy in 2024, so they have to start thinking about lowering rates”. Siegel tips a March rate cut from the FOMC.
- “Even if they don’t lower interest rates in January, they may have to lower it in the March meeting.”
He says inflation is overwhelmed, however:
- “There will probably be core components within the CPI that may proceed to rise, and institutionally decided costs that take months to return down, however to remove these remaining worth will increase would imply crushing the financial system—and that may be inadvisable from an financial standpoint”
