- Former Treasury Secretary Larry Summers has suggested further rate hikes may be needed to keep inflation in check.
- “I probably would have left more room for inflation concerns and left the door a little more open for multiple rate hikes,” he said.
- The Federal Reserve Board decided to raise interest rates by 25 basis points on Wednesday amid the ongoing banking crisis in the US.
Former Treasury Secretary Larry Summers said further interest rate hikes may be needed to keep inflation in check despite the US banking crisis.
“Given the recent strong inflation data, we probably would have left more room to worry about inflation and be a little more open to multiple rate hikes,” Summers said. told CNN on wednesday.
Nevertheless, Summers expressed support for the Federal Reserve’s latest interest rate decision. “It was the right choice. If the Fed had stopped raising rates, I think there was a risk that they would have panicked and alarmed when they clearly planned to do so,” he said. Recent turmoil in the US banking system.
The US central bank pushed ahead with rate hikes at its Wednesday meeting, raising the Federal Funds rate by 25 basis points, meeting market expectations. Current rates are between 4.75% and 5%.
The decision is meant to contain inflation, which remains at a stubborn high of 6.0%. Silvergate Capital, Silicon Valley Bank, Silvergate Capital, Silicon Valley Bank, signature bank.
According to Summers, the US economy faces two paths in the current banking turmoil. The former Harvard president said: “One, I think these banking problems are really going to last and the economy will decline. The other is that this will weather and be very contained.” Stated. Your next decision depends on the path you want to take.