The Federal Reserve has gone too far with its interest rate hikes — creating a difficult upcoming three to six months for stocks, Wharton School professor Jeremy Siegel said Wednesday. The central bank raised rates by 25 basis points in March, which was its first monetary policy decision since the collapse of Silicon Valley Bank and Signature Bank. Siegel said he was bullish on stocks in January. However, seeing the Fed continue to raise rates despite the crisis in the banking sector made him pessimistic on the market and earnings for 2023. “I believe the Fed has already done too much. … Their trajectory was way too high,” Siegel said in a CNBC ” Halftime Report ” interview. “What happened to the banking system, and what I see in data on lending falling off the cliff — [it] really portends a much bigger decline in economic activity. I am shocked that no one at the Fed has cited the reduction in lending that has occurred — almost the most in 75 years, actually.” Siegel said he thinks the Fed doesn’t “recognize how much tightening to place by the fallout from SVB and the lending situation” and that a recession is imminent later this year. “It could be more severe than that, which could lead to more decline in earnings. So that’s when I became more pessimistic for this year.” Siegel anticipates inflation and economic activity coming to a slowdown in the third and fourth quarter of this year, which he believes will lead to a subsequent rate cut from the Fed. “I absolutely think the Fed is going to be cutting rates, much more than even the fed funds rate indicates, by the end of the year, when they see the slowdown in inflation and the slowdown in econ activity. They projected in March negative GDP growth for the second, third and fourth quarter. That is a recession. And that’s the official forecast of the Fed,” Siegel said. Siegel said he favors equities in the long term, however, and thinks the markets will tick up in 2024 and 2025. “I’m still a very bullish long-term investor, [but] I’m more cautious on the short term than I’ve been for a long time.”