Former U.S. Treasury Secretary Summers said policymakers were too optimistic about the latest economic forecasts from the Federal Open Market Committee (FOMC). He expressed caution that both inflation and growth may slow faster than officials expected.
Summers said in an interview on Bloomberg Television’s “Wall Street Week” that the U.S. Federal Reserve is “way too optimistic.” “If anything, we’re more likely to be surprised by either an acceleration in inflation or a deceleration in (growth),” he said, adding: “It’s possible we could see both in the form of stagflation.”
Mr. Summers responding to an interview
Source: Bloomberg
In its quarterly forecast released on the 20th, the FOMC raised its economic growth forecast for this year and next, and also revised down its forecast for core inflation, which excludes food and energy, this year, leaving it far from its 2% target by the end of next year. It was set at 2.6%.
“I think people are a little too optimistic right now, and the FOMC is getting sucked into that optimism,” he said, adding, “I think it’s better to be conservative and expect the results to be better.” .
Economists More Sanguine About US Growth Prospects
Change in forecasts suggests world’s biggest economy will skirt recession
Source: Bloomberg monthly survey
Original title:Summers Says Fed Has Caught Soft-Landing Bug, Surprise Looms
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2023-09-21 17:05:00
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