• Veteran economist Jeremy Siegel warned that the US stock rally of 2023 may end soon. 
• "It's hard to see a lot of upside catalyst for the market in the second half of this year," he told CNBC. 
• Siegel added the US is in for a "mild recession" this year and cyclical stocks have already priced this in.  

Wharton professor Jeremy Siegel warned the US stock rally may end soon - and expects a mild recession to hit the economy this year. 

In an interview with CNBC on Monday, the veteran economist said "it's hard to see a lot of upside catalyst for the market in the second half of this year." 

He added that cyclical stocks - equities that are sensitive to the state of the economy - are priced for a "mild recession." 

"I won't be surprised if that happened and I think as a result, we could get a lot of churn in the second half of the year," Siegel said.

Siegel had dialed up his recession warnings in recent months, forecasting that 2023's bull market sparked by an AI frenzy "is no guarantee we are out of the woods from the downturn."

US stocks have jumped this year, with the S&P 500 rising about 13% amid investor excitement over artificial intelligence stocks following the sensational debut of OpenAI's ChatGPT.

But according to Siegel, US jobless claims have been downbeat, there's declining money supply, homeownership costs are accelerating, and student loan repayments are restarting – all of which are putting pressure on the US economy and stocks. 

To that effect, it's unlikely the Federal Reserve will implement two more interest-rate hikes to cool inflation, as it has signaled, later this year, Siegel said. Rather, there's possibility of rate cuts, he said. 

"We're looking at the student loan payment restarting. We're looking at elevated jobless claims. I'm not talking about disaster, but when people are saying: 'what is on the upside?' I just don't see as many factors," Siegel said.