Jeremy Siegel, a Finance Professor at the Wharton School of the University of Pennsylvania, said that the Federal Reserve must tighten its interest rates quickly. Inflation spiralling out of control, Siegel called for the Federal Reserve to tighten its interest rates quickly.
Dollar in Danger, Says Siegel
On Thursday, Siegel spoke with Rebecca Quick from CNBC’s Squawk Box about Fed Chairman Jerome Powell’s response to recent events. Although Powell has been calling for an immediate interest rate increase this month, some question whether he will follow through after Russia’s invasion last week.
Quick pointed out that Powell did not seem interested in slowing rate increases when he spoke to the House Financial Services Committee yesterday. He did however mention that the Ukraine situation could complicate matters.
Siegel, on the other hand, was more skeptical of the Fed’s commitment in tackling inflation. He pointed out the Fed’s failures and incorrect predictions last year about “temporary inflation”, which is stronger than ever.
Both Powell and Janet Yellen, the Treasury Secretary, have admitted that inflation isn’t “transitory”, as they had said throughout the year. Christine Lagarde, President of the European Central Bank, maintains that inflation will not affect Europe as it does in the United States.
Siegel stated that despite the Russian conflict, the Fed must “bite the bullet on monetary policy” in order to catch up. Bitcoin could be a serious threat if it is not.
Professor: “We have to defend the dollar here.” “We don’t talk about Bitcoin takingover… we have to defend the dollar.”
The ‘Threat to Bitcoin’
Due to its 21 million coin supply limit, Bitcoin is sometimes called “digital gold” or an inflation hedge. It is immune to money printing devaluation and some claim that it will become the world’s reserve currency.
Jack Dorsey, the founder of Twitter, is another such believer. He also claims that the US dollar will eventually be subject to hyperinflation. In a speech in October last year, Cynthia Lummis from the United States shared similar concerns. She concluded her speech by thanking God that Bitcoin is still around.
Others aren’t so enthusiastic about the idea, but they agree with it. Former politicians, including Donald Trump and Hillary Clinton, have raised concerns about the potential threats Bitcoin may pose to the dollar’s global supremacy.
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Marla Brooks – Financial Analysis
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