Generally, the U.S. economic indicators for growth, employment and inflation are good, and Siegel says he expects meaningful improvements in worker productivity as well.
Falling unemployment can force employers to raise wages to attract workers, sparking inflation. But Wharton finance professor Bulent Gultekin argues that cycles of wage-driven inflation are likely to be more modest in the future because of globalization. If wages in one country rise too fast, employers can move production to another.
“There is a lid on wage inflation in the United States and elsewhere, so I don’t anticipate that inflation will jump all of a sudden.” –Bulent Gultekin
But then again, this hike might not hamper stocks.
“To me it’s still about, do we find healthy growth and with it employment [growth]? Those will be the signs that we are back on the trajectory the economy needs to be on. I don’t think we are there yet.” –Amir Yaron