Economics
Larry Summers Says Fed Forecasts Look Ridiculous, Warns on Rate Delay
- Former US Treasury chief blasts Fed’s economic models
- Summers says Fed needs to ask why mistakes keep getting made
This article is for subscribers only.
Former Treasury Secretary Lawrence Summers said the Federal Reserve has failed to account for its mistakes and to realize the damage to its credibility after the latest inflation data dashed hopes that a peak had been reached.
“It’s pretty clear that peak-inflation theory, like ‘transitory’ theory is kind of wrong,” Summers told Bloomberg Television’s “Wall Street Week” with David Westin. “The Fed’s forecasts from March, saying that inflation would be coming down to the 2s by the end of the year was, frankly, delusional when issued, and looks even more ridiculous today.”