The Federal Reserve has inflation on the ropes, and will finally halt its aggressive interest-rate hiking cycle if the labor market begins losing momentum, according to Wharton professor Jeremy Siegel.
"We're going into political season. They have to be sensitive to what's going on in employment. If we begin to see any faltering on that labor market, they are going to give up their rate hikes," Siegel toldThe most important economic data coming out this week will be the US weekly jobless claims report on Thursday, which publishes the previous week's initial claims for state unemployment benefits, Siegel said.
While investors expect the US central bank to halt its interest-rate hikes during its June 13-14 meeting, the market is still pricing in a quarter-point raise for July — and Siegel thinks that will lift rates too high.
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