Finance professor calls for 75 basis point cut in Fed rates amid economic chaos [VIDEO]

In a recent CNBC Squawk Box segment, Joe Kernen and Jeremy Siegel, emeritus professor of finance at the Wharton School of Business at the University of Pennsylvania, discussed the Federal Reserve's monetary policy and its impact on the economy.

Kernen began by highlighting market volatility and referenced Tom Lee's previous predictions about the VIX index.

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He then focused on Siegel's criticism of the Fed's current approach. “Jeremy, I would, I hate that you're probably not happy to say that I told you, since you know what we're witnessing, but you thought the Fed would stay again for a second time, staying at the party . too long and too restrictive,” Kernen said.

“I'm calling for an emergency 75 basis point cut in the Fed funds rate, with another 75 basis point cut indicated for next month at the September meeting, and that's the bare minimum,” says Jeremy Siegel of Wharton: pic.twitter.com/s4CgWx962Q

— Squawk Box (@SquawkCNBC) August 5, 2024

Siegel responded emphatically, calling for significant changes in the Fed's monetary policy. “Absolutely. And you know, this might surprise me, I'm calling for an emergency 75 basis point cut in the Fed funds rate, with another 75 basis point cut indicated for next month at the September meeting, and that's the minimum The Fed funds rate right now should be in the three-and-a-half to four percent range,” Siegel said.

Four years ago today, Trump claimed the stock market would “crash” if Joe Biden was elected.

The market crashes

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He explained his position, explaining the discrepancy between current economic conditions and the Fed's policies. “Let me give you a very simple logic of my position here. At the June meeting, the Fed said that the long-term Fed funds rate, when inflation reached 2% and the unemployment is at 4.2%, it should be 2.8%, that's the normal 2.8% Fed funds rate, well, we blew it with the number of employment. We're at 4.3%, that even argues in favor of a lower. Now we're at two and a half percent. We're down 90% towards the rate target of inflation. These are the two targets mentioned by the Federal Reserve. And how much have we moved the Fed funds rate? That makes absolutely no sense.” Siegel argued.

Donald Trump weighed in on what's going on with some posts on Truth Social: