Jeremy Siegel Says Fed Should Raise Rates Next Week Despite Selloff Risk

Wharton School finance professor Jeremy Siegel said he expects the Federal Reserve to raise interest rates next week, as oil prices and long-term bond yields keep climbing.

Siegel told CNBC's "Closing Bell" that holding rates steady would risk the credibility of Fed Chair Kevin Warsh, who took over the central bank in May 2026.

Fed's Warsh Faces a Credibility Test

Siegel said financial markets routinely test new Fed chairs, and called next week's meeting that test for Warsh. Even so, he said, President Donald Trump has pushed publicly for lower rates.

"I think he's going to bite the bullet and raise rates because if he doesn't raise rates, I think there might be four or five or maybe six dissents, which would be unprecedented," Siegel said.

He pointed to Fed Governor Christopher Waller's inflation threshold. A monthly core reading near 0.2% could support a hold, Siegel said. A 0.3% print, he added, would tilt the committee toward a hike.

Warsh's hawkish Jackson Hole speech last month already pushed hike odds higher. The 10-year Treasury yield has since climbed toward 4.90%, its highest level since 2023. Brent crude, meanwhile, has pushed past $100 a barrel.

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