The Fed 'has our back' and will lower rates in December if needed, says Wharton's Jeremy Siegel

Core Insights - The Federal Reserve's recent stance indicates that a rate cut is not guaranteed for the upcoming December meeting, which has implications for market sentiment and consumer behavior [1][2] - The current economic strength may slow down the bull market but is not expected to halt it entirely, as corporate earnings and guidance remain positive [1] - The next six weeks leading up to the December meeting are critical for assessing consumer reactions to tariff increases and potential layoffs due to AI [1] Economic Outlook - The Fed's cautious approach suggests they are monitoring economic indicators closely, including consumer spending and the impact of tariffs on holiday purchases [1] - The possibility of a rate cut in response to economic slowdown is acknowledged, providing reassurance to the market [2] Market Sentiment - The S&P 500's current level is above many analysts' expectations, indicating a bullish sentiment, although concerns about consumer spending and potential layoffs from AI persist [1] - The market is not seen as vulnerable to a significant decline unless consumer sentiment is adversely affected by rising prices or layoffs [1] Consumer Behavior - Consumer confidence may be impacted by increased prices due to tariffs and potential job losses from AI, which could lead to reduced spending [1] - The Fed's willingness to adjust rates in response to economic conditions is viewed positively, as it provides a safety net for the market [2]