Author Topic: Summers: Inflation Will Be ‘More Sustained Than What People Are Looking For’  (Read 404 times)

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Summers: Inflation Will Be ‘More Sustained Than What People Are Looking For’

Ian Hanchett 3 Dec 2022

During an interview aired on Friday’s broadcast of Bloomberg’s “Wall Street Week,” Harvard Professor, economist, Director of the National Economic Council under President Barack Obama, and Treasury Secretary under President Bill Clinton Larry Summers said that the November jobs report shows that “we’ve got a long way to go to get inflation down” to where we want it to be and “inflation is going to be a little more sustained than what people are looking for.”

Summers stated, “Look, what we saw was a 7.5% annual wage increase for the month, a 6% wage increase for the last three months, and a 5% increase for the year. So, it’s high and it’s rising. And the labor market is strong and we’re still in unprecedented territory in terms of the gap between vacancies and jobs. And I think that what that’s got to tell you is that we’ve got a long way to go to get inflation down where the Fed has said that it wants it to be. We don’t know where this is — how this is all going to play out. But, for my money, the best single measure of core underlying inflation is to look at wages. … I think what this is telling us is that the Fed’s got a long way to go.”

He added that “we’re probably going to need increases in interest rates, I suspect they’re going to need more increases in interest rates than the market is now judging, or than they’re now saying. … I hope I’m wrong, but my sense is that inflation is going to be a little more sustained than what people are looking for.”

https://www.breitbart.com/clips/2022/12/03/summers-inflation-will-be-more-sustained-than-what-people-are-looking-for/
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Summers: We’ll Have ‘Wile E. Coyote Kind of Moment’ with Consumption, Downturn Will ‘Be Fairly Forceful’

Ian Hanchett 3 Dec 2022

During an interview aired on Friday’s broadcast of Bloomberg’s “Wall Street Week,” Harvard Professor, economist, Director of the National Economic Council under President Barack Obama, and Treasury Secretary under President Bill Clinton Larry Summers argued it will be much more difficult to bring down inflation without a recession than many believe because “At a certain point, consumers run out of their savings, and then you have a Wile E. Coyote kind of moment where consumption falls off.” And he believes the downturn will “be fairly forceful.”

Summers said, “t’s much harder than many people think to achieve a soft landing, because there are all these mechanisms that kick in. At a certain point, consumers run out of their savings, and then you have a Wile E. Coyote kind of moment where consumption falls off. At a certain point, people start putting their houses on the market and then you see house prices falling and then other people rush to put them on the market. At a certain point, you see credit drying up, and when credit dries up, people can’t pay back their old borrowing. So, there is this proposition, we’ve talked about it before on the show, David…when the unemployment rate goes up by .5%, it goes up by more than 2%. And that’s because once you get into a negative situation, there’s an avalanche aspect. And I think we have a real risk that that’s going to happen at some point.”

Summers added that “there’s an old saying that things…don’t happen as fast as you think they will, and then they happen faster than you thought they could. And I think that may be the way it is with the downturn. I don’t know when it’s going to come, but when it kicks in, I suspect it’ll be fairly forceful.”

https://www.breitbart.com/clips/2022/12/03/summers-well-have-wile-e-coyote-kind-of-moment-with-consumption-downturn-will-be-fairly-forceful/
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Offline Kamaji

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WADR Mr. Summers:  duh