For many years, the nightmare for the US economy was a Japanese-style spiral of falling prices. Now, the risk for the White House is an economy that overheats, forcing the Federal Reserve to cool it down by raising interest rates so aggressively that it short-circuits the Biden boom, both on Main Street and Wall Street.
“The cruel thing about this is, once again, the little guy is being hurt,” Richard Fisher, former president of the Dallas Federal Reserve, told CNN Business.
Summers: ‘The inflation risk is real’
Larry Summers, the Clinton-era Treasury secretary, is sounding the alarm on inflation via a series of increasingly urgent warnings.
In an op-ed titled “The inflation risk is real,” Summers wrote in the Washington Post Monday that overheating is now the “primary risk” facing the US economy. The former Obama official said the Fed may need to begin to tighten policy and urged the Biden administration to “move past emergency policies,” including addressing a growing shortage of workers.