Rooting inflation out of the U.S. economy will not be quick, and it will not be easy for the Federal Reserve, says former Treasury Secretary Larry Summers.
While speaking during an interview with Fortune, the Harvard economics professor told the magazine that the central bank needs to do more to cool elevated inflation. But while a growing chorus of economists and market analysts fear that the Fed might overtighten, Summers asserted that he is more concerned about the institution backing off too prematurely.
According to the September Survey of Economic Projections (pdf), officials anticipate the benchmark federal funds rate reaching 4.4 percent by year-end and hitting 4.6 percent at the end of 2023, up from the current range of 3.00 percent to 3.25 percent. But Summers believes the better number is somewhere between 5.0 percent and 5.5 percent….