Former Treasury Secretary Larry Summers Responds to Janet Yellen Saying ‘He’s Wrong’ About Inflation
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Prominent economist Larry Summers has responded to Treasury Secretary Janet Yellen telling CNN’s Jake Tapper on Sunday that Summers is incorrect on the issue of inflation.
On State of the Union, in response to Summers sounding the alarm on inflation, Yellen said, “He’s wrong.”
“I don’t think we’re about to lose control of inflation. I agree, of course, we are going through a period of inflation that’s higher than Americans have seen in a long time and it’s something that’s obviously a concern and worrying them,” she continued. “But we haven’t lost control.”
Summers, a former Treasury secretary, tweeted a thread on Monday in response to Yellen.
“She expresses confidence that inflation is decelerating and will be back to target levels by the end of next year. I hope she is right but I think it’s much less than a 50/50 chance,” he tweeted.
She expresses confidence that inflation is decelerating and will be back to target levels by the end of next year. I hope she is right but I think it’s much less than a 50/50 chance.
— Lawrence H. Summers (@LHSummers) October 25, 2021
When the Administration formulated its budget in February, it expected 2 percent inflation in 2021, I was warning about inflation. Their forecast is no longer operative.
— Lawrence H. Summers (@LHSummers) October 25, 2021
In @CNN interview, @SecYellen asserts twice that inflation has decelerated. This is a bit misleading as the 3 month and 12 month CPI inflation rates are both around 5 percent on an annual basis.
— Lawrence H. Summers (@LHSummers) October 25, 2021
The TIPS market is suggesting inflation in 3 percent range over 5 years and more next year. Breakeven inflation over 5 years is up 40 bps in the last month. Expectations data are even more disturbing.
This is part of why my alarm is increasing and Treasury should be as well.
— Lawrence H. Summers (@LHSummers) October 25, 2021
I actually believe the gap between Treasury & Fed statements and the everyday experience of businesses and consumers in terms of inflation has widened in recent months. Until the Fed & Treasury fully recognize the inflation reality, they are unlikely to deal with it successfully.
— Lawrence H. Summers (@LHSummers) October 25, 2021
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