‘Woke’ Fed risks losing control of inflation, says former Treasury Secretary Larry Summers | Fox Business
“We re in more danger than we ve been during my career of losing control of inflation in the U.S.,” Summers, a Harvard University professor, said. “We ve gone even further towards losing it in Britain and I think we re at some risk in Europe.”
The Fed adopted a new strategy last summer in which it will keep the benchmark federal funds rate near zero, even if inflation rises above the preferred rate, in order to reach maximum employment. But over the past couple of months, inflation has been rising at the fastest pace in more than a decade and is well above the Fed’s preferred target of 2%. There are still about 7.7 million unemployed Americans.
Central bankers have also increasingly been discussing the economic impact of climate change and how to incorporate that into their work.
Of all the stuff it has been my privilege to amplify, this is perhaps the most disturbing. As anyone who remembers the great hyperinflation of Weimar can tell you, it’s no joking matter. Unless you’re German of course. Those guys will laugh at anything.