During a CNN interview, Larry Summers, who was Treasury Secretary under former President Bill Clinton and director of the National Economic Council under former President Barack Obama, warned that the ongoing inflation crisis was unlikely to subside in the near future.
“Given that you were worried about this before almost anybody else, and given that now you have got all these CEOs saying it’s going to go a year, maybe even past that, right, at that point, it wouldn’t be transitory,” CNN host Erin Burnett said. “How long do you think inflation is going to go up?”
“I think the odds are that we’re going to have inflation of a kind we haven’t seen in 30 years, until either the Fed takes some significant move with respect to monetary policy, or until there’s some kind of accident that disrupts the economic growth we’re enjoying,” Summers responded. “I think it’s possible but quite unlikely that inflation will recede back to its normal 2 percent level without some significant change in the path we’re now — we’re now on. I think the Fed has made a significant mistake in the approach that it’s taking by doubling down on the massive fiscal stimulus we had at the beginning of the year with really easy monetary policy.”
https://twitter.com/Cavalewis/status/1459598459540054017?s=20
Summers’ prediction comes after inflation hit the highest annual rate since 1990, rising 0.9% in October alone – far more than the 0.6% economists expected, according to CNBC.
A recent poll of economists by the Wall Street Journal likewise suggests that the inflation crisis will persist.
“Economists on average see inflation at 5.25% in December, just slightly less than the rate that has prevailed since June. Assuming a similar level in October and November, that would mark the longest inflation has been above 5% since early 1991,” the Wall Street Journal reported. “Consumer-price inflation will drop to 3.4% by June of next year, then 2.6% by the end of 2022, according to respondents’ average estimates. That is still above the average 1.8% that prevailed in the decade before the pandemic.”
