Analysis of Jeremy Siegel's Comments on Fed's December 2025 Rate Cut and Tariff Effects

On December 10, 2025, Federal Reserve Chair Jerome Powell announced a third consecutive interest rate cut amid internal dissent (the largest split since 2019) [4]. The cut aimed to support a sluggish labor market while addressing tariff-induced inflation, which Powell identified as the main driver of the Fed’s 2% inflation target overshoot [3]. Markets rallied in response, with Energy (+1.67%), Financial Services (+1.56%), and Industrials (+1.47%) leading gains, while Communication Services (-2.36%) lagged [0]. A key surprise that drove market sentiment was the Fed’s announcement to purchase $40 billion in Treasury bills starting December 12, increasing the money supply [5]. Later that day, Wharton professor emeritus Jeremy Siegel appeared on Fox Business’s “The Claman Countdown” to analyze the rate cut and “set the record straight on the effect of tariffs” [Event Source]. However, Siegel’s specific comments from the interview are unavailable due to the lack of a transcript, creating a critical information gap. A Yale Budget Lab study estimated U.S. households lost an average of $2,700 in purchasing power in 2025 due to tariff inflation [1].

1. Market Sentiment Driver
   : The unexpected Treasury bill purchase overshadowed the hawkish nature of the rate cut (due to internal dissent), resulting in positive short-term market performance [5].
2. Tariff Inflation Link
   : Powell’s explicit identification of tariffs as the primary inflation driver aligns with external studies showing significant household costs from tariff policies [1, 3].
3. Siegel’s Missing Perspective
   : Siegel’s renowned expertise on market trends and Fed policy means his untranscribed comments could provide critical context on the rate cut’s long-term implications and potential misperceptions about tariffs.

• Inflation Risks
  : Tariff-induced price increases may persist longer than expected, limiting the Fed’s ability to continue rate cuts [3].
• Fed Dissent
  : Internal disagreements signal uncertainty about future policy direction, which could increase market volatility [4].
• Tariff Policy Uncertainty
  : Future tariff announcements could disrupt inflation projections and market stability [1].
• Sector Opportunities
  : Short-term gains in Energy and Financial Services sectors reflect positive market sentiment, but these trends may be fragile without clarity on long-term policy [0].

This analysis synthesizes market data, Fed policy details, and external studies on tariff effects. The Fed’s December 10 rate cut and Treasury bill purchase led to a short-term market rally, with tariffs identified as a core inflationary pressure costing U.S. households $2,700 annually. The absence of Jeremy Siegel’s specific comments from the Fox Business interview leaves a gap in understanding potential misperceptions about the rate cut and tariff impacts. Decision-makers should monitor Fed policy direction, tariff developments, and future disclosures of Siegel’s insights to gain a more complete view.

[0] Ginlix Analytical Database
[1] Above the Law
[2] KITCO
[3] Axios
[4] Business Insider Africa
[5] CNBC
[Event Source] Fox Business YouTube Video