Former U.S. Treasury Secretary Summers said on Monday that widespread price pressures in the U.S. show the impact of monetary tightening so far has been limited, risking policy makers going beyond expectations. indicated that it was on the rise.
“The Fed is trying to put the brakes on the economy, but it doesn’t seem to be doing much,” Summers told Bloomberg Television. “There is a risk that you will hit the brakes very hard,” he said.
Mr Summers
Source: Bloomberg
But he said it was too early to suggest a reacceleration of rate hikes to 0.5 percentage points at the Federal Open Market Committee (FOMC) meeting in March. He warned that the economy might still come to an abrupt halt as companies began to worry regarding stockpiles and headcount and consumers ran out of savings.
“The Fed must look at the situation with extreme humility,” Summers said, adding: “We should avoid being bogged down by strong statements.” He is a professor at Harvard University and a contributor to Bloomberg Television.
news-rsf-original-reference paywall">Original title:Summers Sees Risk of Fed Hitting the Brakes ‘Very, Very Hard’(excerpt)