Wharton's Jeremy Siegel believes the Federal Reserve should raise interest rates by 75 basis points, or three-quarters of a percentage point, at its upcoming policy meeting next month. "Take your medicine all at once. Not a quarter every" meeting, the finance professor told CNBC on Friday. Twenty-five basis points, or a quarter of a percentage point, has been a customary amount to raise in recent Fed tightening cycles. While the market expects the Fed to hike rates at each of its remaining six policy meetings in 2022, the key question is by how much. Central bankers raised rates by 25 basis points at last month's meeting, the first hike in more than three years . To Siegel, who has been warning for more than a year that the Fed was underestimating the persistence of inflationary pressures in the U.S. economy, that hike was way too late and way too little. "We really need to slow down this super hot economy and get a handle on this inflation," Siegel said in a "Squawk Box" interview. "I think the market wants it." While repeatedly calling on the Fed to catch up and act more aggressively to tighten monetary policy, he said Friday he thinks central bankers are "finally getting it" by recently turning more hawkish. The Fed began to scale back its monthly bond purchases last fall and raised rates in March. The central bank is widely expected to raise rates by 50 basis points at its two-day policy meeting that concludes May 4. That would bring its target rate to a range of 75 to 100 basis points, or 0.75% to 1%. Siegel said he believes Fed Chairman Jerome Powell is "on board for a series of 50 basis point increases," one day after Powell's comments at an International Monetary Fund event. "I would say 50 basis points will be on the table for the May meeting," Powell said Thursday, adding that it's "absolutely essential" to tame inflation and bring stability to prices again. Traders now expect a 75 basis-point move in June, according to the CME Group's FedWatch Tool . The last time the Fed raised rates by three-quarters of a percentage point at a single meeting was 1994, when Alan Greenspan led the central bank. With inflation running at its hottest pace since the early 1980s, there's little doubt on Wall Street that the Fed will be raising rates throughout the year. However, some officials, including Atlanta Fed President Raphael Bostic, have expressed concerns about the Fed potentially being too aggressive and severely hurting economic growth.
Scott Mlyn | CNBC
Wharton's Jeremy Siegel believes the Federal Reserve should raise interest rates by 75 basis points, or three-quarters of a percentage point, at its upcoming policy meeting next month.