By Nick Koutsobinas (NewsMax) Current inflation trends could exert pricing pressures, leading the Federal Reserve to raise interest rates earlier than expected, Jeremy Siegel, professor of finance at the University of Pennsylvania’s Wharton School of Business told Market Watch.
“(I am) nervous about the trends I see in inflation currently,” said Siegel.
His comments follow Federal Reserve Chairman Jerome Powell’s statement that inflation could carry into next year due to supply-chain shortages.
“It’s frustrating to see the supply-chain problems not getting better, in fact they are probably getting worse,” Powell said at a virtual forum with other central bank leaders, including members from the European Central Bank. “It’s very difficult to say how big the effects will be in the meantime and how long they will last.”
Echoing a similar notion, Philadelphia Federal Reserve President Patrick Harker said that an interest rate hike could take place in late 2022 or early 2023, according to Market Watch.
“The problem lies on the supply side, not with demand. Asset purchases aren’t doing much – or anything – to ameliorate that,” Harker said.