Even as higher bond yields rattle equity markets, the U.S. economy remains strong overall, said economist and Wharton professor Jeremy Siegel. “I think this economy is cooking,” Siegel told CNBC’s ” Squawk on the Street ” on Monday. “I know economic surprises, some of them have been negative but on the whole, we have a strong economy.” During the session, the 10-year Treasury yield topped 4.7%, touching its highest level since October 2007. Siegel added that higher bond yields have been pressuring the equity market, and investors now view them differently in an inflationary environment. “I think the recognition that what happened last year, bonds not being the hedge that they had been for 20 years against stock declines has sort of dented [the view of] do you want bonds in your portfolio when inflationary episodes are likely to be more frequently in our future,” he said. The major indexes ended both September and the third quarter lower. The S & P 500 declined nearly 5% last month and lost 3.6% in the third quarter. Siegel said he expected “positive” September payrolls data this week. He also pointed out that the latest jobless claims data, which showed initial claims of 204,000 for the week ending Sept. 23, still suggests strength in the economy. “Wow, that’s one of the first indicators to show weakness on the real side [and] I don’t see it yet,” he said of the jobless claims report. Siegel anticipates core inflation data will be “stubborn” going forward. Nevertheless, he expects that the Federal Reserve will hold steady on interest rates at the November meeting. Siegel noted that the Fed is likely looking at the effect its policy-tightening campaign is already having, including higher bond yields and 30-year fixed-rate mortgages, which are averaging 7.31% as of Sept. 28, according to Freddie Mac . “That’s got to have some depressing effect,” he said. — CNBC’s Gina Francolla contributed to this story.