Rooting inflation out of the U.S. economy won’t be quick, and it won’t be easy for the Federal Reserve, according to 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 said he’s more concerned about the institution backing off too prematurely.
According to the September Summary 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 percent to 3.25 percent. But Summers believes that the better number is somewhere between 5 percent and 5.5 percent….