• The Fed may end up raising rates too high, Wharton professor Jeremy Siegel told CNBC on Monday. 
  • Fed Chair Powell in Friday's speech offered a "very unsatisfactory description" of what inflation data he's monitoring. 
  • "Let's not take Chairman Powell's words as gospel," in terms of policy management, Siegel said. 

Federal Reserve Chairman Jerome Powell's Jackson Hole speech was "unsatisfactory," as it's not clear what measures of inflation the central bank is watching in indicating it will keep raising interest rates, Wharton professor Jeremy Siegel said Monday in expressing concern about policy overtightening. 

Powell "did mention monetary policy works with the lag. If he waits for the official statistics to really start coming down to 2%, he will overtighten and he will make the same mistake on the downside as he made on being too slow on restricting liquidity in 2021 and early 2022, Siegel said in a CNBC interview

Powell at the Fed's economic symposium on Friday signaled a higher-for-longer scenario in rate hikes as policy makers remain far from their 2% inflation target. US stocks were selling off on Monday, extending Friday's slump as investors braced for further Fed hawkishness. 

"90% of the price indices that have been released have been below market expectations," in the past month, Siegel said. "Did [Powell] tell us what is his guidelines now for bringing inflation down? Is he looking at sensitive commodity prices? Is he looking at on the ground prices? I just found it a very unsatisfactory description," said Siegel, who serves as the Russell E. Palmer Professor of Finance at the Wharton School of the University of Pennsylvania. 

Siegel reiterated his view the Fed should raise rates by another 100 basis points and then start cutting in 2023 as the economy slows. The Fed has raised the Fed Funds rate four times this year to a range of 2.25% and 2.5%, and a September rate hike is expected by investors. 

"Let's not take Chairman Powell's words as gospel," said Siegel, in reference to the Fed chief's policy guidance. "Here's a man who, as we all know, a year ago stood at the same podium and said inflation was not a problem."

Key inflation figures eased in July. Headline consumer price inflation in July was 8.5%. The central bank's preferred inflation gauge, the core PCE index, was 4.6% for July year over year. 

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