Wharton’s Jeremy Siegel Predicts Fed Will Likely Cut Rates Due to Tariffs

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Jeremy Siegel, a renowned economist from the Wharton School of the University of Pennsylvania, has forecasted that the Federal Reserve will likely be forced to cut interest rates in response to the economic impact of tariffs. Siegel argued that the trade tensions and rising tariffs are likely to create economic strain, which would prompt the Fed to act to support growth and prevent a slowdown. He highlighted that tariffs, particularly those imposed on China, can raise costs for U.S. consumers and businesses, potentially stifling economic expansion and prompting the central bank to reduce rates in an effort to stimulate spending and investment.

Siegel's comments underscore growing concerns that the ongoing trade war and protectionist policies could lead to broader economic challenges, including reduced consumer confidence and slower business investment. By cutting rates, the Fed would aim to lower borrowing costs, making it easier for businesses and consumers to access credit. However, Siegel also noted that this could only provide temporary relief if the trade conflicts persist, and he stressed the importance of resolving these issues for long-term economic stability.


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