Jeremy Siegel: This economy can take a rise in short term interest rates

>> AND CLOSING BELL STARTS RIGHT NOW. >> AND WELCOME TO CLOSING BELL. I'M CARL QUINTANILLA IN FOR SCOTT WAPNER. THIS MAKE OR BREAK HOUR BEGINS WITH SOME GREAT RELIEF, AS THE TEN YEAR YIELD DOES PULL BACK FROM SOME 24 YEAR HIGHS. IT GETS YOUR GET YOUR SCORECARD WITH 60 MINUTES TO GO IN THE TRADING SESSION. A BIT OF A TUG OF WAR HERE BETWEEN THE RATE RELIEF AND OIL, WHICH HAS BEEN STUBBORN ON SOME HEADLINES REGARDING ADDITIONAL ASSETS POTENTIALLY TO THE GULF. AND THAT LEADS US TO OUR TALK OF THE TAPE THIS AFTERNOON, HOW YOU MIGHT POSITION YOUR PORTFOLIO AS WE KICK OFF THE FINAL QUARTER OF THE YEAR. LET'S BRING IN JEREMY SIEGEL, PROFESSOR OF FINANCE AT THE WHARTON SCHOOL AND WISDOMTREE CHIEF ECONOMIST. PROFESSOR, GOOD TO HAVE YOU. THANKS FOR JOINING US. >> GOOD TO SEE YOU, CARL. >> DID YOU GET THE INKLING OF THE BEGINNINGS OF A BOND RALLY TODAY? >> WELL, I'M RELIEVED WE WE HAD ONE BECAUSE. I REALLY COULDN'T BELIEVE THE YIELDS THAT I WAS I WAS SEEING YOU KNOW, PARTICULARLY I LIKE TO LOOK AT THE TREASURY INFLATION PROTECTED BOND YIELDS AND THE THE 30 YEAR ONE REACHED THREE AND A THIRD PERCENT, 3.35%. AND I DON'T THINK WE'VE SEEN THAT FOR, YOU KNOW, 20, 25, 30 YEARS. AND NOW, YOU KNOW, IS THAT, YOU KNOW, WHEN YOU GET THREE, ALMOST 3.5% AFTER INFLATION, A 20PE STOCK MARKET GIVES YOU 5% AFTER INFLATION. SO THERE'S STILL A GOOD MARGIN THERE. BUT THAT THAT MARGIN IS IS SHRINKING. AND IN MY OPINION, ONE REASON WHY TECH HAS HELD OUT SO WELL. I MEAN LOOK AT THE MARGINS OF TECH OF MAG-7. YOU KNOW THERE'S 50% 6070. SO YOU KNOW THERE'S A THERE'S A TICK UP OF INTEREST RATES, BUT, YOU KNOW, OUTSIDE THE TECH AND THE, IN THE REAL WORLD, WHEN THEY'RE WORKING ON MARGINS OF SEVEN, EIGHT, NINE, 10%, YOU START RAISING THOSE INTEREST RATES AND YOU REALLY CUT INTO WHAT WHAT WE HAVE PROFITS. SO, YOU KNOW, TO, YOU KNOW, WE ALL THOUGHT WE HAD THIS GREAT ROTATION GOING ON AT THE FIRST HALF OF THIS YEAR. AND IT, IT CERTAINLY LOOKED LIKE IT WAS ROLLING. BUT I THINK THIS RISE IN INTEREST RATES HAS REALLY, YOU KNOW, PUT A STAMP ON IT. >> RIGHT. ARE THE BULLS RIGHT TO TAKE HEART IN WHAT JEFFERSON SAID TODAY ABOUT TAKING MORE TIME, SORT OF PIGGYBACKING ON WHAT WE GOT OUT OF WALLER? >> YEAH. I MEAN, YOU KNOW, OBVIOUSLY WARSH IS IN A REAL DIFFICULT SITUATION FOR THE NEXT MEETING. IT'S IT'S SIX DAYS BEFORE THE MIDTERMS. TRUTHFULLY, I THINK WE NEED TWO MORE INCREASES THIS YEAR. BUT HE MIGHT BE ABLE TO CONVEY, I THINK, TWO MORE. BUT I THINK HE MIGHT SAY TO THE COMMITTEE, LISTEN GUYS, YOU KNOW, IF YOU GUYS HOLD OFF, LET'S MAYBE WE'LL DO A 50 BASIS POINT IN DECEMBER. LET'S NOT MAKE THIS POLITICAL BY DOING IT SIX DAYS BEFORE THE MIDTERMS. YOU KNOW, HOW MUCH DIFFERENCE, YOU KNOW, DOES A MONTH OR TWO MAKE ON A 2025 BASIS POINTS. SO I THINK HE'S GOT ANOTHER, YOU KNOW, JUGGLING JOB TO DO THERE. BUT I MEAN, WHEN YOU TAKE A LOOK AT THE FUTURES MARKET AND SOME OF THE OTHER I MEAN, THIS IS THE STRENGTH OF THE ECONOMY. AND AND THE RISE IN YIELD JUST TELLS YOU THAT, YOU KNOW, THIS, THIS, THIS ECONOMY CAN TAKE A RISE IN SHORT TERM INTEREST RATES. >> YEAH, YEAH. NICE PIECE OUT OF GREG TODAY AT THE JOURNAL ARGUING THAT A A SIX THREE NOMINAL GDP REGRESSES TO A TEN YEAR AT FIVE AND A HALF WITH REALLY NO PROBLEM. >> YEAH. YEAH. AND NORMALLY WE WE THINK OF, YOU KNOW, THE TEN YEAR BEING, YOU KNOW, 80 BASIS POINTS ABOVE THE FED FUNDS. WELL, YOU KNOW, I MEAN, IF YOU'RE, YOU KNOW, IF YOU'RE AT FIVE AND FIVE AND A QUARTER, FIVE AND A HALF, THAT'S WAY ABOVE WHERE WE ARE RIGHT NOW IN TERMS OF THE NORMAL SLOPE. I MEAN, SOME PEOPLE, YOU KNOW, HAVE SAID THAT THE TWO YEAR IS A GOOD INDICATOR OF WHERE F