According to a professor at the Wharton School of the University of Pennsylvania, bitcoin could be taking over. He added that the Fed “has been terribly wrong over the last year” about inflation and must now act to defend the U.S. dollar.
Professor calls on the Fed to take action to defend the USD
In an interview with CNBC Friday, Wharton’s finance professor Jeremy Siegel discussed inflation, the bitcoin takeover, and the need for the Federal Reserve to defend the U.S. dollar.
He is the Russell E. Palmer Professor Emeritus of Finance at the University of Pennsylvania’s Wharton School. In addition to demographics, financial markets, and long-run asset returns, he also conducts research on macroeconomics.
As a result of Fed Chairman Jerome Powell’s remarks last week that the first rate hike will be in March and will likely be 25 basis points, Siegel said the Fed is already behind and should be making a more aggressive move.
We need to do much more than that … I am disappointed that Chairman Powell did not look at the history that this is not the time to slow down,” the Wharton professor explained.
Over the last year, the Fed has been horribly wrong. Look at all this temporary inflation. Look at what they did for inflation protection last year – so far below what actually occurred all the way up to December.
He said last week that it would be a “big policy mistake” for the Fed to slow down interest rate hikes because of the situation in Ukraine.
While stating that “Jay Powell is a very good man” and “a good communicator,” Professor Siegel stressed: “The Fed has been very wrong and they are going to have to catch up and they really have to admit they’ve got to bite the bullet here.”
Regarding bitcoin, he urged the Federal Reserve to take action to defend the U.S. dollar, emphasizing:
We talk about bitcoin taking over and we need to protect the dollar.
Since quite some time, the professor has been observing the increase in popularity of bitcoins. He said that BTC has replaced gold as an inflation hedge for millennials in January.
Furthermore, he warned that the Federal Reserve is “so far behind the curve that we have a lot of inflation already embedded in,” predicting that “The Fed will have to hike many more times than the market expects.”