Central Banks
Summers Sees Higher Fed Interest Rates, Increased US Taxes
- Fed may need to raise rates by half point or more, he says
- Ex-Treasury chief sees unprecedented long-run fiscal challenge
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Former Treasury Secretary Lawrence Summers sees US interest rates headed higher in the short-run and US taxes rising significantly in the longer run as the world’s biggest economy comes to grips with a persistent inflation problem and burgeoning government debt.
In a dinner speech at the Peterson Institute for International Economics on Tuesday, the Harvard University professor said the US seemed stuck with an underlying inflation rate of around 4.5% to 5% that’s more than double the Federal Reserve’s 2% target.