Jeremy Siegel on Fed: Put rate cuts on hold and will be neutral for a while 'at best'

Summary

• Jeremy Siegel outlines four market scenarios based on imminent geopolitical outcomes with Iran, ranging from best to worst.
• Best scenario: A deal announced within hours triggers a 1000-point Dow rally and drives all-time highs through spring and summer.
• Second and most likely scenario: Promising negotiations lead to a delay, resulting in a relief rally (e.g., 250-point Dow move observed).
• Worst scenarios: Bombing starts, causing a big market drop; severity depends on Iran's military response effectiveness against U.S. defenses.
• Even with a deal, oil prices will not retreat to $60 immediately due to infrastructure damage and persistent risk premium.
• Anticipates significant fiscal expansion from increased defense spending, citing Trump's existing $200 billion request likely to grow.
• Given these developments, expects the 10-year Treasury yield to remain above 4%, reversing earlier expectations for lower yields.
• States Fed rate cuts are on hold and policy will be neutral "for a while at best," walking back prior advocacy for easing.
• Highlights extreme uncertainty, with key outcomes likely to play out within the next few hours.