Wharton Faculty economist Jeremy Siegel expects the Federal Reserve to chop rates of interest considerably within the second half of 2023, probably sparking a giant inventory market rebound.

“I don’t assume charges are going to stay increased. I feel they’re going to go down dramatically within the second half due to the weakening economic system, the management over inflation,” the professor emeritus of finance stated on CNBC’s “Squawk Field” Thursday. ”I feel that’s what the market is wanting ahead to.”

If the Fed brings down its low cost charge, “the market’ll say, ‘Hey, a gentle recession or perhaps a reasonable recession for a 12 months, I’ll take that.’ That’s why I feel the market nonetheless has an excellent probability of giving that 10 to fifteen% achieve, the forecast that I gave on Jan. 2,” Siegel stated.

The Ate up Wednesday slowed its rate-hiking tempo by elevating its benchmark charge by 1 / 4 proportion level, with Chairman Jerome Powell acknowledging inflationary pressures have began to reasonable whereas indicating the central financial institution anticipates additional charge will increase.

Siegel, who has sharply criticized the Fed over the previous 12 months for being late in responding to inflation and for aggressively elevating charges when it did reply, appeared to take coronary heart in Powell’s newest feedback.