Wharton economist calls for drastic Fed rate cuts.

In a groundbreaking interview with CNBC, esteemed economist Jeremy Siegel advocates for a significantly faster interest rate cut by the US Federal Reserve. The emeritus professor at the Wharton School of Business calls for an emergency rate cut of 75 basis points and an additional cut of 75 basis points next month. One basis point corresponds to one-hundredth of a percentage point, which translates to a planned reduction of the interest rate by a total of 1.5 percentage points. Siegel argues that the interest rate should already be between 3.5% and 4%, significantly lower than the current target range of 5.25% to 5.5%. His recommendation follows disappointing labor market data that have heightened fears of an impending recession in the US. The situation is further complicated by the decision of the Japanese central bank to raise the interest rate above 0% for the first time, which jolted both stock and cryptocurrency markets. As a result, Bitcoin (BTC) fell below the $50,000 mark for the first time since February on Monday, evoking memories of the market crash in March 2020 at the onset of the COVID-19 pandemic. Siegel, serving as Chief Economist at WisdomTree Investments, believes that a new cycle of Fed rate cuts is long overdue. Siegel also noted that the Fed once stated the long-term interest rate should be 2.8% when the inflation rate is at 2% and the unemployment rate is at 4.2%. Siegel warns of the consequences of the Fed acting slowly: "If they respond as slowly on the way down as they did on the way up – which, by the way, was the worst policy mistake in the last 50 years – we face a very tough economic period ahead.