Summer: Fed’s Course Leads to Stagflation, Recession

“I believe the Fed has not internalized the magnitude of its errors over the past year, is operating with an inappropriate and dangerous framework, and needs to take far stronger action to support price stability than appears likely. … The Fed’s current policy trajectory is likely to lead to stagflation, with average unemployment and inflation both averaging over 5 percent over the next few years — and ultimately to a major recession.”

Larry Summers, who served as U.S. Treasury Secretary from 1999 to 2001.

November Another Robust Jobs Month


Number of jobs the American economy created in November, the government reported Friday, “a robust showing that all but guarantees policy makers at the Federal Reserve will raise interest rates for the first time in nearly a decade when they meet this month,” the New York Times reports. “The unemployment rate held steady at 5 percent, unchanged from October.”

Sun Sets on Summers’ Fed Nomination

I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interest of the Federal Reserve, the Administration or, ultimately, the interests of the nation’s ongoing economic recovery.

— Former Treasury Secretary Lawrence Summers, pulling out of the contest to succeed Ben Bernanke as chairman of the Federal Reserve, the Wall Street Journal reports.