Unimaginable: Former Obama economist warns Joe Biden inflation will ‘come hard’
Former President Barack Obama’s Treasury Secretary Larry Summers issues a warning that things are about to ‘come hard’ under this unimaginable situation with inflation during President Joe Biden’s tenure in the White House. Summers warns the American people about the situation with the financial markets and inflation, suggesting that the Federal Reserve might be getting ready to strap things down a lot harder than what investors thought would happen.
“We’re headed into what’s likely to be a turbulent period,” Summers told Bloomberg Television’s “Wall Street Week” with David Westin. “I’m not sure we’re on a trajectory that’s going to get us to 2% inflation without more interest-rate increases than the market is now anticipating.”
Summers cautioned that a number of factors that had been helping pull inflation down may reverse. One sign of that dynamic came from used-car prices, which climbed 2.5% last month — the most since the end of 2021, according to an industry report on Tuesday. Gasoline prices have also risen this year.
“There are a variety of bounce-back factors that we’re going to have,” said Summers, a Harvard University professor and paid contributor to Bloomberg Television. For overall inflation, “the gains in terms of further reduction are going to come hard” going forward, he said.
Now it’s just a matter of time to see how President Joe Biden will handle the financial turmoil that’s causing Americans to spend more money for less product while inflation tears through the country. Interest rates are out of control, rent and mortgage costs are out of control, and even the dollar stores went up to $1.25 while people are making $15 an hour just to work at McDonald’s and count six whole chicken nuggets – a skillless job that doesn’t warrant anymore than the minimum wage, or $8 per hour tops. The price of everything needs to come down and go back to normal, but people keep raising wages thinking that will fix things – which it will never do. You bring costs down, you don’t keep increasing things. It doesn’t take a rocket scientist or financial expert to figure that out, just a little bit of common sense, but Democrats don’t have any of that.
Bloomberg’s report continued talking about Larry Summers’ warning:
The risk is “this tightening cycle is not just about one more, two more, three more 25 basis-point increases, but something more fundamental,” Summers warned.
The consumer price index rose 6.5% in the year to December, well down from the peak gain of 9.1% in June. Next week, the government will release the January CPI, which economists expect to have climbed 6.2% on a year-on-year basis. The monthly gain is seen at 0.5%, still above the kind of pace consistent with 2% inflation.
