Fed should 'tee up' rate cuts next meeting, says Wharton's Jeremy Siegel

IN2H Joining us today, Jeremy Siegel, professor emeritus of finance at University of Pennsylvania's Wharton School, a business chief economist at Wisdom Tree, a professor. It's great to have you. Pretty nice gains here mid year. We are seeing some people say why not tap the brakes? What do you think? Well, I, I think the momentum is still there. By the way, we're talking about, you know, what happened last night during that hour and a half, S&P futures were trading and they were up 10 points. So the question of at least at this point, does the stock market like Trump better than Biden? I, I think that that vote at least was, was taken then. Now, of course, when policies finally get enacted, things can change very, very differently. And secondly, you know, if if Trump does, he's decided to be stepped down and there's a, a, a free new possible nominee for the Democratic Party. Remember, early hopefuls were interesting. Almost anybody but Trump on the Republican side easily beat Biden. And almost anyone but Biden on the Democratic side easily beat Trump. So it was sort of an interesting juxtaposition between these two men. So, yeah, politics is important that on on the economy, I would say the the recent data has been on the weakest side and not real weak, not not a recession scare, but you know, we were coming in 3% a lot of people the second quarter 3 1/2. I would say we're to barely to at this point with the data coming in and given the good PCE data and what I think is going to be very good data, poor inflation in the second-half. I really think the Fed is should tee up the cut on the July 31st meeting, confirm it at Jackson Hole in August and and do it in September. Do you think the markets already priced that in? Well, I think the, the fact that the yields are down and the stock market up and those probabilities our price and actually my feeling is I, I would say what one maybe 1 1/2 cuts is priced in. If you look at that you know, January Fed funds, I actually think there, there will be more because I think there might be a little bit more softness of the economy and better inflation numbers, both of those feeding lower rates. Now slower economy isn't the one that you want to be good for the stock market, but lowering inflation is certainly and rate cuts because of that and lower rental rates. You know, we, we have wisdom tree, we, we have, we keep an index of current rentals and current home prices and our CPI core and PCE core is now below the 2% target on a year over year basis. So as many economists have have mentioned, in fact, even Powell and Janet Yellen, we're waiting for those lower rental rates to feed in. It looks like the second-half of this year they will to give us that good inflation. Professor Siegel, I guess to broaden it out just a little bit, we're now up about 50% in the S&P from the 2022 market low after that bear market that we did have there. You've got about 18% annualized gains for the last four years or so. It seems as if the market is built in a lot, although of course, if you count it from the 2022 high, we're not really over our skis. I wonder where you think we are in the life cycle of this bull market. But it's hard to say because that's almost saying, you know, you know when it's it's going to end. Listen. P PS Going forward, you know, they're 21 but with strong momentum on earnings. And as has often been said, there's a bifurcated market. You take out tech and you're more at 17. You go to the smaller and mid size, you're more like 13 and 14 Tech is, as I've been saying, has been delivering the bacon for all those investors and that momentum is still there. And I've been saying that for 3-4 months. So I don't see that breaking, but you know, X tech, there's absolutely no overvaluation and tech is not overvalued if it keeps on push pulling off the earnings gains that it has been able to do so far. We are also, thank God, nowhere near 2000. The question is, are we in 199798? No one really knows. You know, it started like that. Could there be a craze? There always could be in markets, but certainly we are not there yet.