Summers Warns Fed Against ‘Financial Dominance,’ Urges Rate Hike

Former Treasury Secretary Lawrence Summers said the Federal Reserve shouldn’t be spooked into easing its campaign to contain inflation out of excessive concern about a credit crunch in the wake of the recent banking turmoil.

“It would be very unfortunate if, out of solicitude for the banking system, the Fed were to slow down its rate of interest-rate increase beyond what was appropriate given the credit contraction,” Summers said on Bloomberg Television’s “Wall Street Week” with David Westin.