The Fed shouldn't let the Russia-Ukraine crisis impact the pace of tightening, says Wharton's Jeremy Siegel

• Wharton professor Jeremy Siegel said escalating Russia-Ukraine tensions shouldn't affect the pace of Federal Reserve rate hikes.
• "It would be a big mistake if this crisis reduced the amount of tightening we need to control inflation," Siegel said in a CNBC interview.

Wharton finance professor Jeremy Siegel sounded the alarm on the central bank's battle with inflation and rejected calls to slow the pace of tightening amid the Russia-Ukraine crisis.

The Federal Reserve is widely expected to begin a series of rate hikes next month to bring inflation down from 40-year highs. But markets have wavered amid rising overseas tensions, and traders have begun to speculate whether the Fed will tighten policy less aggressively.

"It would be a big mistake if this crisis reduced the amount of tightening we need to control inflation," Siegel said in a CNBC interview. "I think the Fed rate hikes is 10 times as important as what's going on in Russia right now."

To be sure, the Ukraine crisis has lifted energy prices, adding more inflationary pressure, as Russia is a top exporter of oil and gas.

On Monday, Russian President Vladimir Putin ordered troops into eastern Ukraine, triggering calls for retaliatory sanctions by Western nations. On Tuesday, Germany halted the Nord Stream 2 pipeline, which would deliver gas to Western Europe.

But Siegel pointed out oil prices were rising even before the crisis, with analysts predicting $100-per-barrel crude based on other factors.

"There has just been way too much money growth and stimulation and the Fed is way behind the curve in acting against it," he said.