Economics

Summers Says Rising Yields Mean Investors Sensing Inflation Risk

Markets ‘substantially’ underestimating where rates headed
Summers says lawmakers are ‘playing chicken’ with debt limit

WATCH: Lawrence Summers says “markets are substantially underestimating what’s likely to happen to interest rates before too long,” Source: Bloomberg)

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By Simon Kennedy

October 1, 2021 at 1:43 PM UTC

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Former U.S. Treasury Secretary Lawrence Summers said investors may be tuning into the risk of an overheating U.S. economy and the chance that pushes the Federal Reserve into a faster withdrawal of monetary policy stimulus.

At the end of a week in which U.S. Treasury yields surged toward the highest levels since early 2021, Summers said that markets may be showing “recognition” that inflation won’t ease and that the Fed will have to do more to control it.