Closing Bell Closing Bell: Signs of Life in IPO Market 6/20/25
Jun 20, 2025
Jeremy Siegel, a Wharton School finance professor and WisdomTree chief economist, offers insights on stock market dynamics and economic trends. He discusses the resurgence of stocks like CarMax amid potential Federal Reserve rate cuts and the complexities surrounding tariffs and inflation. Siegel also touches on how tech investments are shifting and the performance of major firms, while addressing the implications of generative AI on software companies. Investors' sentiments in the banking sector are analyzed against a backdrop of geopolitical tensions and ongoing Fed policy debates.
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Fed Split on Rate Cuts
- Fed Chair Chris Waller advocates cutting rates soon, believing tariffs are a one-time price shock not requiring tightening.
- Chair Powell prefers waiting to see inflation impact first, showing deep Fed division on policy timing.
Tariffs as Temporary Price Shock
- Tariffs act like a tax that raises prices but don't cause excess demand inflation needing Fed tightening.
- Looking through tariffs, the economy is near the Fed's 2% inflation target and rates should be closer to neutral.
Inflation Driven by Housing, Insurance
- Many firms are mitigating tariff impacts, compressing inflation despite price pressures.
- Housing and auto insurance drive 75% of current inflation, and both are cooling, easing inflation concerns.