Investors don’t like uncertainty and instability, especially when it comes to the financial sector. And that’s perhaps why stocks have had a choppy ride after the recent bank failures.

But a prominent economist sees a silver lining amid the crisis.

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“If this banking accident occurred later, we would have much higher rates,” Jeremy Siegel, professor of finance at the Wharton School of Business, says in his latest weekly commentary. “So, a natural downshift in how tight policy will become from this is one of silver linings from this current banking crisis.”

While the stock market continues to be volatile, the professor sees better days ahead.

“The recent turmoil in markets also makes me more optimistic on the outlook for 2024.”

That said, the Fed may not be done with its rate hikes.

“Torsten Slok, Chief Economist at Apollo, wrote on Saturday that his team estimated that tighter financial conditions over the last week could translate to a 1.5% increase in the Fed Funds Rate—or 6 more 25 basis point hikes!” Siegel writes.

Investors don’t like prolonged rate hikes. But not all assets are created...

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