A bolder Federal Reserve and upcoming midterm elections spell a "breather" for the stock market in 2018, according to longtime bull Jeremy Siegel.

The Wharton School finance professor highlighted the Fed's plans to hike rates an estimated three times as evidence for his moderate view on equities. Such action from the central bank would move the rate from 1.25 percent up to 2 percent.

"If you go with the three increases, that brings the yield on cash to 2 percent," Siegel said Monday on CNBC's "Halftime Report." "People are going to get 2 percent on cash, it's going to be little bit more difficult for the stock market."

To be sure, Siegel is renowned for his bullish bets and remains positive on the markets overall. This past February, Siegel told CNBC that the Dow Jones industrial average reaching 22,000 was "on the horizon," roughly half a year before the index passed the mark in what has turned out to be a great year for equity investors.

The Dow Jones industrial average closed 55 points higher Monday, while the added 0.32 percent to a nearly 19 percent climb since January. Much of the charge has been led by technology, with names like Facebook, Adobe and PayPal surging more than 50 percent.

"I think we've had quite a run. You know, we can't keep getting 200,000 jobs," added Siegel, referring to recent reports of job additions from the Department of Labor. "We're at 4.1 [percent unemployment]; at this rate we go below 3.5 by the end of next year to 3. There's almost never been a time when that has not accelerated wages, which does mean a challenge for equities."

"I don't predict a disaster next year, but a breather more than anything else."

The professor also underscored uncertainty in politics in his forecast.

"It's very possible House or Senate or even both might turn Democratic, which would make any further Trump legislation impossible," Siegel added. "Now that's one reason they're going for this corporate tax cut; honestly, I think that's built in. I think that's one of the big reasons we've had this big rise over the past six weeks."