Let’s break down the road ahead. Wharton School professor of finance Jeremy Siegel joins us. Professor, do you think it’s justified given what we’ve seen on rates, on geopolitics headwinds piling up? Well, Sarah, we know we had an incredible steady rise from last October, almost record setting, not a 2% decline. And and you know that actually is not healthy either because you get momentum players just jumping on the market. I I think a little pullback. And by the way, I don’t even think we have a 5% which is the minimum definition of a pullback. But a little bit of softening is certainly not unhealthy for the market. I I think we’re going to get a good PCE deflator number next week. Yeah, which I think a 2.7% is will be the lowest in three years. And by the way that’s only 3/10 away from the year end target that the Fed set in March of of 2.4% for that deflator. So I think yeah we had three disappointments on on CP. I I think PCE will come in and I think our CP is are going to start coming in in May and in June. So and and when we take a look at the futures we’ve squeezed down to basically one cut by December, I actually think that we could get more if we get these good deflator numbers and inflation numbers. So I I think you know the, I I still see gains in the market going forward this summer. I know that the PCE is the Fed’s so-called preferred inflation measure, but the CPI has really captivated the attention of investors and of the Fed. You, you heard me go through all the reactions of these Fed members. They changed their tune after the March CPI report. So how are they going to explain, if you, if you think they’ll be encouraged by a better PCE, which they should be. How do they explain that gap and how do they convince investors, the American public themselves that they’re doing the right thing if they if they’re cutting based on PCE, right. Well, first of all the the the CPI and and and the producer price index come out a couple weeks before the PCE. So it’s the most informative data that that economist and the Fed has to to predicting that PCE. I look at the CPI much more importantly also, but I see good trends if forward-looking in that CPI. For instance, we we’ve talked about the fact that that shelter actually shelter and insurance are more than 50% of the last 12 months. CPI core increase and looking forward both of those looked very much more favorable particularly the shelter segment which is 41% of the CPI core. So looking forward, those those are those are very promising and important factors that could suppress the CPI and that will feed into the PC deflator. So your view is we’re going to get more cuts now than the market is expecting and that’s a good reason to buy stocks. Yeah, I mean that I think that now that you know we could all say at the beginning of the year the market was way overly optimistic with four or five cuts. Now it’s squeezed down to one and I actually think that we might get two or three cuts by the end of the year. I don’t think the Fed knows, I don’t think really anyone knows. They follow just month by month what the data is. And by the way, one thing that’s important that that Chairman Powell said and he said there was disappointment in the in the CPI. However, he did say we have a dual mandate if the economy softens and you mentioned that some people are talking about a a softening March early April that is another reason for us to cut rates unless inflation is let’s say out of control. They really have to look at both of those and I found those words to be very encouraging in terms of forward action for the fact.
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