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Fed 'Absolutely' Has to Speed Up Inflation Fight: Wharton's Siegel

The Fed is "very much behind the curve' on inflation, Jeremy Siegel, prominent finance professor at the Wharton School, says.
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The Federal Reserve must speed up its fight against inflation, says Jeremy Siegel, renowned finance professor at the University of Pennsylvania’s Wharton School.

The Fed now plans to finish tapering its bond purchases around the middle of next year, and some economists expect rate hikes shortly thereafter.

“Absolutely they’re going to have to move faster,” Siegel said of the Fed on CNBC. “They’re very much behind the curve.” 

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Consumer prices soared 6.2% in the 12 months through October, the biggest surge in more than 30 years.

Treasury Secretary Janet Yellen said Monday that “we do have to be concerned about inflation.”

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Siegel said, “Yellen and others are softening the market up for an announcement at the Dec. 15 meeting [of the Fed’s policymaking Federal Open Market Committee] of a speedup of the taper, which means a sooner rise of interest rates.”

Financial markets are reacting, he said, noting the blowout in technology stocks over the past few days and the rise of the 10-year Treasury note’s yield to 1.67% Tuesday (it recently stood at 1.68%).

“The market says that the reappointment of [Jerome] Powell [as Fed chair] gives the Fed more of a free hand to raise interest rates,” Siegel said.

Meanwhile, Gabriella Santaniello, founder of retail consulting firm A-Line Partners, told TheStreet that inflation won’t hold back holiday spending this weekend.

"While it affects things like food and gas, people do have a little bit of extra money that will last through the holidays. From what we're seeing stores, there is still incredibly high demand."

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