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Central Banks

History Shows No Example of Hiking US Rates Too Fast, Summers Says

  • Former Treasury chief says Fed more likely to go past 4.5%
  • Summers says markets ‘waking up’ to the need for Fed action
Bloomberg business news
WATCH: Former US Treasury Secretary Lawrence Summers says the Federal Reserve may have to eventually raise rates above 5% to get inflation under control. Source: Bloomberg

Former Treasury Secretary Lawrence Summers argued against the Federal Reserve holding back from aggressive monetary tightening, saying that greater economic damage would result from any hesitation.

“History records many, many instances when policy adjustments to inflation were excessively delayed and there were very substantial costs to that,” Summers told Bloomberg Television’s “Wall Street Week” with David Westin. “I am aware of no major example in which the central bank reacted with excessive speed to inflation and a large cost was paid.”