Why Wharton Professor Jeremy Siegel Says The Fed Is Reading The Wrong Data, CPI Print Is 'Bogus' And Inflation Is 'Over'

Zinger Key Points
  • Rising housing costs were largely responsible for the increase in core CPI last month, according to the print.
  • "It's actually a bogus number if you want to know my opinion," Jeremy Siegel says.

Wharton Professor of Finance Jeremy Siegel has been pounding the table on inflation over the past few months, urging the Fed to abandon lagging indicators. That didn't stop Tuesday when he called the inflation print "bogus."

What To Know: Core inflation, which excludes volatile food and energy prices, increased slightly on a month-over-month basis. Rising housing costs contributed the most to the increase in core CPI.

The SPDR S&P 500 SPY sprinted higher in Tuesday's premarket session following the release, but then pulled back after investors highlighted rising housing costs.

"Listen, the housing at plus 0.6% is a nonsensical number. It's actually a bogus number if you want to know my opinion," Siegel said Tuesday on CNBC's "Fast Money Halftime Report."

You can look at any other rental index or housing index and see that costs are falling, he stressed. 

"If it's going down, tell me what core inflation is. I'll tell you what it is. It's negative ... it will be negative next month and it's actually been negative for the last two months," Siegel said. 

Check This Out: 3 Experts On What 7.1% CPI Print Means For The Federal Reserve — Is It Too Early To 'Downshift' Or Will The Fed Jumpstart A Market Rally?

The Fed needs to stop looking at "stale" housing data and come to the realization that inflation is "over," the Wharton Professor said.

Regardless, Siegel is anticipating data in early 2023 to prompt a pause from the Fed. He told CNBC he expects Wednesday's rate increase to be the last in this cycle. 

The discussion should begin to shift to when the Fed should lower rates, he said, adding the Fed has no real idea what they are going to do next year. The central bank is data dependent, he said, but "history shows the market is much smarter than the Fed."

Siegel told CNBC that he hopes one of the Fed officials will suggest the use of current housing data instead of continuing to rely on lagging information.

"Then tell me what inflation actually is," Siegel said.

Don't Miss This: Wait, What? Wharton Professor Jeremy Siegel Says The Housing Market Is Going To Do This

SPY Price Action: The SPY closed Tuesday up 0.75% at $401.93, according to Benzinga Pro.

Photo: Courtesy of Shutterstock.

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