Stocks Near All-Time Highs, But Fed Policy Looms Over Santa Rally
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The stock market is near all-time highs, with analysts forecasting the S&P 500 topping 4,700 and the Dow hitting a new record in coming months.
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Wharton's Jeremy Siegel says the only risk that could derail the Santa Rally is the Fed remaining overly committed to 2% inflation without flexibility.
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Siegel believes Fed Chair Powell has signaled a degree of moderation recently, predicting no rate hike at the next meeting.
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Goldman Sachs and Bank of America estimate rate cuts could come in late 2024, but Siegel says timing depends on economic data and ongoing inflation declines.
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Siegel urges caution around predictions from the Fed's upcoming Dot Plot, given their poor forecasting record.