At the beginning of 2023, there weren’t many bulls on Wall Street. Analysts and CEOs were recovering after a brutal year in which the S&P 500 sank nearly 20% and the tech-heavy Nasdaq Composite cratered 33%. For most, morale was low, but Wharton professor Jeremy Siegel was feeling optimistic.

“I think we should have a very good year for equities, with U.S. markets up 15% to 20%,” he wrote in his weekly WisdomTree commentary, per Insider. “Most think these gains have to wait for the second half of the year, but I can see this happening in the first half.”

Siegel turned out to be right. The S&P 500 is up just over 13% year to date, and many of Wall Street’s bears have become, well, less bearish in the meantime. But Siegel has done quite the opposite, once again standing apart from the crowd.

“It’s hard to see a lot of upside catalysts for the market in the second half of this year,” he told CNBC on June 26, noting that many cyclical stocks are already “priced for a mild recession” and he “wouldn’t be surprised if that happened.”

Although the unemployment rate remained near pre-pandemic lows last month, Siegel pointed to rising jobless claims, especially over the past few weeks, as evidence that the economy is slowing under the weight of the Fed’s interest rate hikes. “Jobless claims have not been looking good,” he said. Weekly initial jobless claims hit their highest level since October 2021 earlier this month at 264,000, data from the Bureau of Labor Statistics shows.

Siegel also pointed to “softness in earnings” and the impact of the restart of student loan payments on consumer spending as potential headwinds for stocks. Americans will be on the hook for some $18 billion a month when student loan payments resume on Sept. 1, according to an estimate from investment bank Jefferies. Economists have repeatedly warned that this cost will slow consumer spending, which has been surprisingly resilient in the face of high inflation and rising interest rates.

Between June 16 and 19, Morgan Stanley surveyed roughly 2,000 student loan borrowers, and 37% said they’ll need to cut their spending in other areas to make their monthly loan payments when they resume, while 34% said they won’t be able to make their payments at all.

“Looking at student loan payments restarting, elevated jobless claims, I’m not talking about disaster, but when people are saying: ‘Well, what is on the upside?’ I just don’t see as many factors,” Siegel said.

Rising home prices and mortgage rates are also slowing consumer spending, which makes up roughly 70% of GDP growth, making a recession more likely, according to the Wharton professor.

“The cost of homeownership has tripled over the past three years. And what’s happened to real incomes? Stagnant,” he said, arguing that many homebuyers are not going to have the money for “trips, cars, and everything else which is keeping the economy going.”

For Siegel, who has been a consistent critic of the Fed’s fight against inflation over the past year, arguing they’ve lifted interest rates too fast and too high, increasing the odds of recession, there is at least one positive way to look at the coming mild recession.

“The bright side of a mild recession is that not only will we not get rate increases, but I think there is still—and I’ve been saying this even though everyone thinks there’s no possibility—[a chance] that we will get rate decreases by the end of the year,” he said.