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Ekonomické zprávy
22.11.2021

Another bad inflation report may trigger a market correction - Wharton finance professor

Jeremy Siegel, Wharton finance professor, warned that he expects a serious market correction, but not because of the risks of a surge in Covid-19, but because of a radical change in the parameters of the Fed's policy to combat inflation, which has reached more than a 30-year high.

"If another negative inflation report comes out, I doubt that the market will be prepared for a sharp change in the position of Fed Chairman Powell," Siegel said, adding that the Fed is far behind schedule in terms of taking anti-inflationary measures.

In his opinion, given the current situation with inflation, the next Fed meeting (December 14-15) should shed light on measures to combat high inflation. Siegel noted that if the Fed announces more aggressive measures to curb price growth, the market may enter a correction phase.

According to Siegel's forecasts, the growth of consumer inflation will be observed for several more years, and aggregate inflation will reach 20-25%.

Meanwhile, Siegel noted that high-tech companies, which are part of the Nasdaq index, continued to benefit from the inflationary background.

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