Jeremy Siegel said the bond market has left the new Federal Reserve chairman no room: if Kevin Warsh does not raise rates next week, Siegel expects as many as six of his own colleagues to dissent.
The consensus argument for standing still is politics — a hike before the midterms invites a fight with the White House. Siegel's argument is that the 10-year Treasury moving toward 5% and the futures market both say the Fed has to go anyway, and that refusing would cost the chairman more credibility than acting.
"Well, let me tell you, I would not want to be Kevin Warsh next week."
Siegel is Professor of Finance at the Wharton School and Chief Economist at WisdomTree, and has been the show's regular read on Fed credibility for years.
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👤 Guest: Jeremy Siegel, Professor of Finance at the Wharton School and Chief Economist at WisdomTree
🎙️ Host: Scott Wapner, a co-anchor of CNBC's Closing Bell
📰 Published: 10 September 2026 on CNBC's Closing Bell
🔴 YouTube | 🟣 Apple Podcasts | 🔗 Episode page | ⏱️ 5 min
Key Takeaways
The market always tests a new Fed chairman, and next week is Warsh's test
Not hiking risks four, five or six dissents, which Siegel calls unprecedented
Stocks sell off first and recover if the 30-year Treasury reads the hike as credibility
He put 25 or 50 basis points on the short end, one move now and one in October, as survivable
Gasoline futures point to another 20-30 cent rise at the pump, which he says works against consumer sentiment
1. The Test for a New Chair
Scott Wapner opened on a day when the S&P 500 had touched its high of the session after Apple's iPhone event, oil was higher, and the 10-year Treasury yield was near 4.90%. Siegel went straight to next week's meeting.
His starting point is that the bond market and the futures market are both telling the Fed to move. "The market, ten years moving towards five. The futures are all signaling you should raise."
He framed the decision as an institutional test rather than an economic one. "And I think this is the test for Kevin Warsh." He noted the chairman would probably prefer to wait until after the midterms and keep some goodwill with President Trump
Siegel said the political cost runs both ways, since the president has promised to react badly to a hike and the market will react badly to a hold
2. Raise, Or Get Six Dissents
Asked what Warsh will actually do, Siegel said he was on the fence and then came down on one side.
He expects the hike, and his reason is the committee rather than the data. "I think he's going to bite the bullet and raise rates. Because if he doesn't raise rates, I think there might be 4 or 5 or maybe six dissents, which would be, you know, unprecedented."
Tomorrow's consumer price index could still change the arithmetic. He noted Fed governor Christopher Waller's stated line: a 0.2% monthly print might justify holding, a 0.3% print would push toward a hike
The commodity and bond markets settle it for him. Looking at the commodity indexes, oil and "most importantly, what's going on in the bonds," his read was that the Fed simply has to raise
3. Shudder First, Then Recover
Siegel's market call is a two-step: an immediate drop, then a rally, on condition the long end cooperates.
The first move is down. "Well, I think the market will first shudder and you'll see a sell off."
The recovery depends on the 30-year Treasury treating the hike as proof of inflation-fighting credibility. "And if, as I expect, that long bond reacts positively saying, okay, the Fed is credible at fighting inflation, we're going to get a recovery in the stock market." He called the sell-off "a first kind of a, you know, cold shower" that the market needed
He put a size on what is tolerable. "25, 50 basis points on the short end, you know, if they do one this time and one in October, is, is, you know, not the end of the world and would put the market on notice that the Fed still is serious about fighting inflation."
Wapner suggested a hike might also quiet the bond investors pushing yields up. Siegel agreed: "And I think so. Otherwise they're going to be screaming at the top of their lungs."
4. Range Bound Into Quarter End
Wapner read out the case for caution from Wall Street's own notes, and Siegel largely accepted it.
The show cited Citadel's Scott Huebner, whose highest-conviction view is that the highs for the month are already in, on seasonal weakness, the mid-month blackout that stops companies buying back their own shares, options expiry in the third week and the quarter ending. Wapner added, in his own words rather than Huebner's, that all of it transfers risk in the wrong direction
Siegel's own reason for caution is the pump price. Oil kept rising, diesel more so, and he said records in gasoline futures point to another 20 to 30 cent rise in gasoline. "This is not good for consumer sentiment."
On what the next several weeks look like, he said range-bound is "probably the best that we can expect", with the next earnings cycle arriving at the end of the quarter
Siegel's bottom line is that a hike next week would hurt stocks for a day and help them for a quarter, because the alternative is a Fed the bond market does not believe.
Bonus Insights
Wapner opened the hour on two stock stories rather than the Fed: the S&P 500 at its high of the day, better than 3%, after Apple's iPhone event, and Oracle trading lower ahead of results due in Overtime, which he called a critical report
Siegel put the political pressure in the president's own words. "I mean, you know, he said if you don't lower rates, I'm going to throw a fit." His point was that the chairman faces a public fight whichever way he moves
The pattern he is applying is not new to the show. He said the market tests every new Fed chairman, and that he has made the point on air before this one arrived
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