Could Larry Summers Be Right About Inflation?

Politico: “There is a new fear circulating inside the West Wing of the White House: Maybe Larry Summers was right. The former Treasury secretary has been warning since February that President Joe Biden’s big-spending agenda was creating the risk of an inflation spike this year, potentially cutting into the economic recovery from the Covid-19 pandemic. For the moment at least, Summers is looking prescient.”

Bloomberg reports Summers was at the White House yesterday meeting with top Biden aides.

Financial Times: “Jay Powell, chair of the Federal Reserve, has so far succeeded in steering the US central bank and financial markets towards his view that the surge of inflation gripping America will be fleeting. But confidence in that judgment was called into question on Tuesday after a larger-than-expected increase in the June consumer price index raised new alarm bells about the extent of inflation in the world’s largest economy.”