Jeremy Siegel, professor of finance at Wharton, said the Fed could be forced to scale back its bond purchases faster than expected because of soaring inflation, which could spook the market.

"I think inflation will be much higher than the Fed thinks," Siegel said on Thursday. I think the Fed will be under pressure not only to start to scale back-which they will announce-but also faster than the market thought. This is where I think the market will be a little surprised and challenged. "

To prop up the economy during the COVID-19 epidemic, the Fed bought $120 billion a month of Treasuries and mortgage-backed securities. The Fed said at its September policy meeting that it would begin to withdraw some of its support.

Jerome Powell, chairman of the Federal Reserve, said policymakers expected bond purchases during the outbreak to end around mid-2022.

Siegel believes that in the face of rising price pressures, the Fed may be forced to take more aggressive action. He expects the US consumer price index, to be released next week, to rise faster than expected in September.

Siegel also pointed to signs of inflation in rising natural gas prices. In fact, the cost of natural gas and oil has been rising. Figures show that the average price of a gallon of gasoline in the United States this week was $3.22, the highest level since October 2014.

"I think they may have to pick up the pace so that the curtailment of bond purchases will end more quickly, which is why I think it will scare the market," Siegel said. It will be a challenging quarter, from the fourth quarter to the first quarter of next year. "

Siegel believes that U. S. stocks will continue to wobble for the rest of 2021 and early 2022. The s & p 500 fell about 4.8% in September, breaking seven consecutive months of gains and its worst monthly performance since march 2020.