Wharton's Jeremy Siegel Warns Fed's Hawkish Tone Is 'Misguided', Says He'd Be A Buyer In Case Of A 5-10% Correction

Jeremy Siegel, professor emeritus of finance at the University of Pennsylvania’s Wharton School of Business, on Tuesday warned that the Federal Reserve’s hawkish tone on inflation is misguided.

“The Fed’s more hawkish tone is also a proximate driver of the risk-off sentiment, and I think that Fed stance is misguided,” Siegel said in his weekly commentary.

He underscored this by stating that categories pushing Consumer Price Index (CPI) higher, which are health insurance and energy prices, are not responsive to tighter demand caused by elevated interest rates. “Staying more restrictive on policy won’t move those needles,” he added.

Buyer In Case Of A Correction

Siegel also stated that he would be a buyer of U.S. equities in case of a correction.

“If big-box guidance softens under affordability pressure, a textbook 5–10% correction is in play. I’d be a buyer into that magnitude of weakness, because the macro still argues for resilience rather than recession,” he said.

He noted that if artificial intelligence (AI) earnings grow, then the current forward price-to-earnings (PE) of 23x can be digested. However, if earnings under-deliver, then Siegel recommends “owning stocks that benefit from curve normalization rather than paying ever-higher prices for growth stocks.”

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