{"id":474720,"date":"2022-07-15T22:57:59","date_gmt":"2022-07-15T19:57:59","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/larry-summers-says-the-federal-reserve-is-wrong-about-economy\/"},"modified":"2022-07-15T22:57:59","modified_gmt":"2022-07-15T19:57:59","slug":"larry-summers-says-the-federal-reserve-is-wrong-about-economy","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/larry-summers-says-the-federal-reserve-is-wrong-about-economy\/","title":{"rendered":"#Larry Summers says the Federal Reserve is wrong about economy"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a41ae8717fcf\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a41ae8717fcf\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/larry-summers-says-the-federal-reserve-is-wrong-about-economy\/#%E2%80%9CLarry_Summers_says_the_Federal_Reserve_is_wrong_about_economy%E2%80%9D\" >&#8220;Larry Summers says the Federal Reserve is wrong about economy&#8221;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CLarry_Summers_says_the_Federal_Reserve_is_wrong_about_economy%E2%80%9D\"><\/span>&#8220;Larry Summers says the Federal Reserve is wrong about economy&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div>\n<aside class=\"single__inline-module alignleft\">\n<\/aside>\n<p>The Federal Reserve \u201clost its way\u201d last year as inflation gripped American households and still isn\u2019t being realistic about the impact it will have on the economy, ex-Treasury Secretary Larry Summers warned on Friday.<\/p>\n<p>Summers, who was far ahead of the Fed in predicting price surges over the last year, stepped up his criticism of the central bank after federal data showed inflation spiked to a new peak of 9.1% in June.<\/p>\n<p>\u201cIn 2021, our central bank let us down quite badly,\u201d <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bloomberg.com\/news\/articles\/2022-07-15\/summers-says-fed-let-us-down-quite-badly-and-still-unrealistic\">Summers told Bloomberg<\/a>. \u201cAs a consequence, they find themselves in a very, very difficult position, not least because they don\u2019t have the credibility that they once enjoyed given their repeated poor forecasting record.\u201d<\/p>\n<p>\u201cI have to say that it\u2019s not something that\u2019s been fully fixed,\u201d Summers added.<\/p>\n<p>Summers said the Fed\u2019s \u201cdot plot\u201d projecting inflation would return to its 2% target and  4.1% for unemployment by 2024 was \u201chighly implausible\u201d and suggestive of \u201chighly problematic groupthink\u201d at the central bank.<\/p>\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"682\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/07\/jerome-powell-ap-01.jpg?w=1024\" alt=\"Jerome Powell\" class=\"wp-image-23073040\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/07\/jerome-powell-ap-01.jpg?quality=75&amp;strip=all&amp;w=1535 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/07\/jerome-powell-ap-01.jpg?quality=75&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/07\/jerome-powell-ap-01.jpg?quality=75&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>Jerome Powell has pledged an \u201cunconditional\u201d Fed fight against inflation.<\/figcaption><figcaption><span class=\"credit\">AP<\/span><\/figcaption><\/figure>\n<p>Summers, a former top adviser to Democratic Presidents Bill Clinton and Barack Obama, has argued that higher unemployment is an unavoidable consequence of the policy tightening the Fed must enact to address inflation \u2013 meaning millions of Americans are likely to lose their jobs.<\/p>\n<p>As of June, the national unemployment rate was just 3.6% in what remained a historically tight labor market.<\/p>\n<p>Investors are now betting that the Fed will implement a massive full-point interest rate hike later this month \u2013 its largest increase in decades \u2013 as it scrambles to tamp down prices. The drastic action would exacerbate fears that the central bank won\u2019t be able to engineer a \u201csoft landing\u201d for the economy and avoid a recession.<\/p>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"682\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/07\/larry-summers-getty-01.jpg?w=1024\" alt=\"Larry Summers\" class=\"wp-image-23073049\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/07\/larry-summers-getty-01.jpg?quality=75&amp;strip=all&amp;w=1535 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/07\/larry-summers-getty-01.jpg?quality=75&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/07\/larry-summers-getty-01.jpg?quality=75&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>Larry Summers predicted inflation\u2019s alarming rise months before the Fed acknowledged it.<\/figcaption><figcaption><span class=\"credit\">Getty Images<\/span><\/figcaption><\/figure>\n<p>Summers added that he felt the Fed lost focus last year, ignoring its core mission of maintaining price stability in favor of other projects that weren\u2019t central to its responsibilities.<\/p>\n<p>\u201cIt was talking about the environment, it was talking about <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">social<\/a> justice in a range of things, it was confidently dismissing concerns about inflation as transitory and it made mistakes in the core function of a central bank, including leaning into highly expansive fiscal policies rather than accommodating them,\u201d Summers said.<\/p>\n<p>After last month\u2019s Fed meeting, Chairman Jerome Powell said the bank was laser-focused on the fight against inflation \u2013 even as he warned that further \u201csurprises\u201d were possible. Powell has also noted the Fed\u2019s commitment to bring down prices is now \u201cunconditional.\u201d<\/p>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"682\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/07\/jerome-powell-ap-02.jpg?w=1024\" alt=\"Fed Chair Jerome Powell\" class=\"wp-image-23073041\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/07\/jerome-powell-ap-02.jpg?quality=75&amp;strip=all&amp;w=1535 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/07\/jerome-powell-ap-02.jpg?quality=75&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/07\/jerome-powell-ap-02.jpg?quality=75&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>Summers has been critical of the Fed\u2019s response to inflation.<\/figcaption><figcaption><span class=\"credit\">AP<\/span><\/figcaption><\/figure>\n<p>Earlier this week, Fed Governor Christopher Waller\u00a0indicated he supports a three-quarter-percentage-point hike at the next meeting \u2013 though he didn\u2019t rule out the possibility of a full-point hike.<\/p>\n<p>Waller also described the June inflation data as a \u201cmajor league dis<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ointment.\u201d\n                        <\/p><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/nypost.com\/2022\/07\/15\/larry-summers-says-the-federal-reserve-is-wrong-about-economy\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;Larry Summers says the Federal Reserve is wrong about economy&#8221; The Federal Reserve \u201clost its way\u201d last year as inflation gripped American households and still isn\u2019t being realistic about the impact it will have on the economy, ex-Treasury Secretary Larry Summers warned on Friday. Summers, who was far ahead of the Fed in predicting price&#8230;<\/p>\n","protected":false},"author":1,"featured_media":474721,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/07\/powell-summers-comp.jpg?quality=75&strip=all&w=1024","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[131404,5069,70550,70551,78738,88069,127049],"class_list":["post-474720","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-7-15-22","tag-economy","tag-federal-reserve","tag-inflation","tag-jerome-powell","tag-larry-summers","tag-the-fed"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/474720","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=474720"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/474720\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/474721"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=474720"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=474720"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=474720"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}