5 December 2022 | Macroeconomics | CEOs

Larry Summers urges Fed to boost rates more than markets expect

Larry Summers urges Fed to boost rates more than markets expect

Former US Treasury Secretary Lawrence Summers warned that the Fed may have to raise interest rates in the future. Rates, as the economist notes, will be increased more than the markets currently expect.

Bringing inflation down to the Fed's target is not an easy task, according to Summers. He also believes that Fed policymakers will need more increases in interest rates than the market estimates.

Interest rate futures suggest the Fed will boost rates to around 5% by May next year. At the moment, the target range is 3.75-4%. Economists are expecting a 50 basis point rate increase at the December 14 meeting. On the same day, Fed officials will publish new projections for the key rate.

Raising the rate to 6%, according to Summers, is possible. He also says 5% is not the best estimate.

Summers believes the best indicator of core underlying inflation is wage growth. The former US Treasury Secretary says inflation will be more sustained than people are looking for.

The economist also warned that during this recession, interest rates will be higher compared to those seen in the past.



Company MarketCheese
Period: 29.11.2024 Expectation: 700 pips
AUDCAD does not exit downward trend lines
22 November 2024 36
Period: 02.12.2024 Expectation: 560 pips
Brent oil on its way up after exiting bilateral pattern
22 November 2024 114
Alexandra_Belova
Alexandra_Belova

Listed among the best MarketCheese authors
1st in the segment "Oil and gas"
2nd in the segment "Currencies"
Period: 26.11.2024 Expectation: 2840 pips
Selling USDJPY with target at 152.00 influenced by BoJ policy
21 November 2024 90
Elena_Dorokhina
Elena_Dorokhina

Listed among the best MarketCheese authors
1st in the segments "Currencies" and "Metals"
2nd in the segment "Oil and gas"
Period: 25.11.2024 Expectation: 700 pips
EURUSD can not move far away from 1.052 level yet
20 November 2024 84
Period: 12.12.2024 Expectation: 2080 pips
Canadian statistics reverse USDCAD to selling
20 November 2024 66
Elena_Dorokhina
Elena_Dorokhina

Listed among the best MarketCheese authors
1st in the segments "Currencies" and "Metals"
2nd in the segment "Oil and gas"
Period: 30.11.2024 Expectation: 660 pips
Selling AUDCAD to 0.9040
20 November 2024 45
Go to forecasts