Jeremy Siegel, a Wharton School finance professor and chief economist at asset manager WisdomTree, said 30-year Treasury Inflation-Protected Securities, or TIPS (government bonds indexed to inflation), now offer real returns of about 3.35%—a level not seen in 20 to 30 years. He said stocks still outperform bonds, but the advantage is narrowing. At a valuation of 20 times earnings, stocks offer about a 5% return above inflation, leaving roughly 1.65 percentage points to compensate investors for equity risk. The 10-year Treasury yield touched 5.33% on Thursday, according to Bloomberg, matching levels last seen in 2002. Siegel said higher borrowing costs are especially burdensome for companies outside the Magnificent 7, whose profit margins are 7% to 10%, compared with 50% to 70% for the seven mega-cap technology-led stocks. He said the resulting pressure has stalled the rotation into broader stocks, while about 75% of S&P 500 stocks fell in September even as the index edged higher. Siegel, who urged a September rate increase, said the Federal Reserve needs two more hikes this year, compared with the central bank's projection for one. He suggested Fed Chair Kevin Warsh could persuade colleagues to skip October and raise rates by half a point in December. Fed Vice Chair Philip Jefferson said colleagues may need more time to assess the next move, while Robert Kaplan, a Goldman Sachs vice chairman and former Dallas Fed president, said traders already demand a Warsh premium. If real yields remain near 3%, stocks may need stronger earnings to support current valuations.