Professor of Finance at Wharton Jeremy Siegel a pessimistic prediction for the stock market on Monday, suggesting that the bottom of the current decline would not be reached for many more months. The remarks were made when the benchmark S&P 500 followed the tech-heavy Nasdaq into a correction area by falling more than 10% from its peak. The Nasdaq is in the correction zone when it falls below 7000. He stated to CNBC that “I believe there’s more suffering to come.” “I definitely wouldn’t be if both the S&P and the Nasdaq went into the realm of a bear market,” the author says.
Who is Jeremy Siegel?
Professor of Finance at the Wharton School of Business at the University of Pennsylvania Jeremy Siegel joins CNBC’s Squawk Box. To discuss his forecasts for the neutral Interest rate that the Federal Reserve will use to combat inflation. According to comments made by Siegel to CNBC, “If the Fed panics at some time, slams on the brake. We’re going to be going through the windshield.”
In an interview with CNBC, he said, “I believe the Fed has got to be more active. That’s going to be the trigger that eventually causes the market to bottom out. And it’s going to happen towards the end of the first or second quarter of this year,” said the analyst.
The Federal Reserve will announce its first policy decision of the year on Wednesday. At this meeting, it was largely anticipated that the central bank will herald the beginning of rate rises in March.
Siegel believes the Federal Reserve will hike Interest rates eight times in 2018. Twice as often as other Wall Street experts anticipate. The well-known author of the financial book “Stocks for the Long Run” anticipates that Federal Reserve Chair Jerome Powell will demonstrate a greater degree of hawkishness at this meeting of policymakers.
What is the meaning of Deploying Cash?
You may be acquainted with the phrase “deploy” if you’ve ever heard it to describe the movement of soldiers into position for military action or the use of abilities.
And in the context of finance, the same concept may be understood by the phrase “deploying cash”. Putting money “to work” or “to use” is what we mean when we talk about “deploying” it.
To “keep” something is the opposite of releasing it or an alternative. Please keep it in your bank account for the time being. Because of this, and considering the current state of Interest rates, it will remain at the same level.
That might be the choice of least risk. Since it won’t happen, you don’t have to worry about your bank going out of business until the very last possible moment, since it won’t happen.
On the other hand, this indicates that the capital (the quantity of cash) at your disposal won’t grow (at least not very much). To put it another way, the only way to profit from the money you already have is to spend it. And in doing so, you risk losing it.
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