The U.S. stock market doesn't need copious Federal Reserve interest-rate cuts to enjoy a strong 2024, Wharton School and WisdomTree economist Jeremy Siegel suggested Monday.
"I do not think we need five to six cuts from the Fed to have continued equity market gains this year," he wrote in his weekly commentary posted on WisdomTree's website.
The dot plot, the chart indicating Fed members' projections on policy moves, "penciled in three rate cuts," but the key insight Siegel took from Fed chair Jerome Powell's discussion in December "was the willingness by the Fed to cut rates if the economy weakens," the emeritus finance professor said.
Siegel, senior economist to WisdomTree, previously was concerned the Fed might be stubborn in its inflation fight even if the economy softened but has been encouraged that the central bank is considering the employment side of its mandate as much as the inflationary side, he noted.
"If the economy is strong and the Fed does not cut rates as much as some expect — earnings growth may end up being supportive for the market," he wrote.
