| Former U.S. Treasury Secretary Lawrence Summers. He is currently a professor at Harvard University. © AFP=News1 |
Former Treasury Secretary Lawrence Summers has called for the US central bank, the Federal Reserve, to raise rates more aggressively to curb inflation that has soared to a 40-year high.
He appeared on CNN on the 24th and said, “We need strong action from the central bank.”
“Failing to contain inflation by Fed Chairman Powell would be a bigger mistake than pushing the US economy into recession,” he said.
It means to prepare for a recession and catch inflation first.
Former Secretary Summers, a Harvard University professor and Bloomberg writer, also predicted that the U.S. economy is likely to plunge into a recession due to the Fed’s aggressive rate hikes.
However, he emphasized that even if the US economy falls into a recession, it is necessary to catch inflation first.
“The US government can do more to control inflation,” he said. “Congress should raise taxes first.” He also added, “We should also push for the abolition of tariffs on imported goods.”
“There’s a lot we can do to curb inflation,” he said.
The Fed raised interest rates by 0.75 percentage points for the first time in 28 years on June 15, and is expected to raise rates by 0.75 percentage points at the Open Market Committee (FOMC) meeting on the 26th-27th.
The consumer price index (CPI) of the United States recorded 9.1% in June, the highest in 41 years.
