Summers Says Slowing Balance-Sheet Runoff Pace Is ‘Alarming’ Signal on Debt Fragility

Former Treasury Secretary Lawrence Summers said the Federal Reserve’s decision to dramatically slow down the shrinkage of its US Treasuries holdings amounts to a worrying signal about market demand for longer-term federal debt.

“This should be getting people’s attention as an alarming development,” Summers said in an interview on Bloomberg Television’s Wall Street Week with David Westin. The move indicated that Fed policymakers determined there was “limited absorption capacity in the markets for long-term bonds,” he said.