Stock market sage Jeremy Siegel says the Dow is headed toward 20,000 as early as year-end.
The professor of finance at the Wharton School and author of “Stocks for the Long Run” told CNBC on Friday that he still believes “20,000 is the fair market value of the Dow given interest rates and even prospective interest rates, but it’s not going to be there in the next month or two, maybe by the end of the year.”
Siegel has been predicting 20,000 on the Dow since July, but in early March he became more tentative about his forecast because of a possible Federal Reserve rate hike by midyear.
Now Siegel says, “The Fed mostly gets it” while before he “thought they were being way too aggressive in projections of interest rates.”
After the last Fed meeting in mid-March, Fed Chair Janet Yellen said the central bank’s decision to raise rates will depend on more improvement in the labor market and higher inflation, closer to the Fed’s 2% target. The stock market rallied, on the expectation that the Fed wouldn’t necessarily hike in June. The Fed hasn’t raised rates in nine years.