Wharton finance professor Jeremy Siegel said the Federal Reserve would already be raising interest rates after a stronger-than-expected August jobs report, arguing that pressure from the 2026 midterm elections and President Donald Trump is holding policymakers back. The US economy added 162,000 jobs, more than triple the recent monthly average, while unemployment remained at 4.1% and annual wage growth stayed at 3.1%. Siegel described the labor market as supply-driven rather than overheated, citing higher labor-force participation and upward revisions to June and July payrolls. Traders subsequently increased bets on a rate hike at this month’s Federal Open Market Committee (FOMC), reversing expectations formed after weak July payrolls. Trump renewed his demand for lower rates in a Friday Truth Social post, threatening to halt trade with countries where the US runs a deficit. Siegel said the 2026 midterms give Trump an added incentive to keep borrowing costs low, making a September hike politically difficult for the White House. He also cited roughly 10% growth in M2 money supply since the brief US-Iran war began, calling the pace excessive. Siegel expects any market reaction to a hike to be brief, provided tariffs remain contained. Producer and consumer price reports due Thursday and Friday are expected to help resolve the policy debate.