Harvard University Professor Summers told Bloomberg that the Fed should be wary of the risk of the economy getting too hot.
Regarding the rate hike, Summers said, “If there is no rate hike in June, the economic warming continues and inflation remains high, they should be open to the possibility of a 50 basis point increase in July.”
In the past 14 months, the Fed has gradually increased the policy rate to the range of 5-5.25 percent.
Summers said he was skeptical that the US economy would make a soft landing, but said that the likelihood of the economy entering a recession could be delayed until next year.
Regarding the non-farm employment data released today, which came above the claims, Summers commented that “we still have a tight employment market”.
Source: Bloomberg HT