Siegel Warns of Sell-Off: Warsh Will Raise Rates to Combat Inflation

Jeremy Siegel, a Wharton professor, believes that new Fed Chair Kevin Warsh will be forced to raise interest rates at next week's FOMC meeting. According to Siegel, the bond market is demanding action, and if the Fed holds off on raising rates, it would trigger unprecedented dissent among board members.

The national average for regular gasoline has hit $4.16 per gallon, up 88.5% from last year's range, signaling another potential rise in gasoline prices. The 10-year Treasury yield has also reached its highest reading in the past year at 4.83%, indicating that inflation remains a concern.

Siegel predicts that equities will first experience a sell-off, but if the long bond treats the hike as credible in fighting inflation, stocks could recover. He expects range-bound trading in the weeks following the decision.