Wharton School economist Jeremy Siegel questions the basis for Federal Reserve Chairman Jerome Powell's recent hawkish comments, criticizing the chairman's forecasting credibility and voicing concern that the central bank will go too far in raising interest rates to fight inflation.
The stock market has tumbled sharply over three trading sessions since Powell said Friday the Fed must "keep at" raising its benchmark interest rate and that policymakers need more evidence inflation is headed downward.
Appearing Monday on CNBC, Siegel called Powell's remarks at the Fed's Jackson Hole, Wyoming, economic conference unsatisfactory.
"Let's not take Chairman Powell's words as gospel, because here's a man who as we all know a year ago stood at the same podium and said inflation was not a problem. Here's a man who in congressional testimony told us, we don't think money matters, our studies have shown money doesn't matter, then they proceeded to explode the money supply at the greatest rate in our history," Siegel said.
"Here's a man that a year ago said, 'We're not even thinking about thinking about raising interest rates,'" Siegel said on "Squawk Box." "And most troubling was in response to the last four FOMC meetings, in the Q&A period, he was asked, 'Is policy going to cause a recession?' He said, 'No, we're just going to reduce the number of job openings to bring them into balance with the demand.'"
In the last month, 90% of the released price indexes were lower than market expectations, Siegel noted.
