President Biden’s proposed $1.9 Trillion stimulus package will help move the economy forward, according to Jeremy Siegel, the Russell E. Palmer Professor of Finance at the Wharton School of the University of Pennsylvania and a senior investment strategy advisor to Wisdom Tree Funds.
As a result of the fiscal stimulus and the continued rollout of the COVID-19 vaccine, Siegel remains bullish on the U.S. economy and expects equities and inflation to rise in 2021. Additionally, he believes inflation rate will run well above the Federal Reserve’s 2 percent target rate and will do so for several years which he opined “is not good for bondholders”. In his opinion, U.S. Treasury bondholder, because of rising inflation and bonds rates, will be paying for the unprecedented President’s fiscal and Federal Reserve’s monetary stimulus.
Investors should avoid bonds
Bottomline, he believes interest rates are heading “higher in 2021 and, as a result, bonds are not a good place for investors to put their money”.
Jeremy Siegel, finance professor at the Wharton School of the University of Pennsylvania, says he is still very bullish on the U.S. economy and expects equities and inflation to rise in 2021. https://t.co/rYueqALXE5 pic.twitter.com/iFjZ4WUFdd
— Bright Advisers, LLC (@brightadvisers) February 17, 2021
References:
- https://www.ft.com/content/6536113f-f509-41e2-bee0-597ed90843b6
- http://searchbeat.com/whartons-jeremy-siegel-investors-should-avoid-bonds/business/