TIP - Larry Summers Says Next Fed Move Could Be Up Rather Than Down As Inflation Data Calls Into Question The 'Soft-Landing Paradigm' | Benzinga
Consumer and producer price inflation numbers for January came in hotter than expected, denting investor expectations for a Fed rate cut in the near term. Former Treasury Secretary Larry Summers on Friday weighed on the numbers and their implications for interest rates.
Inflation Unlikely To Budge: There is a possibility that the economy is going through a mini paradigm shift, Summers said in a Bloomberg “Wall Street Week” interview.
“The soft-landing paradigm with the assumption that inflation was headed down to two [percent] in a tranquil, healthy real economy has certainly been called into question by these data,” the economist said.
Economists’ assumption that housing was going to be a major deflationary force was not substantiated by the week’s consumer price inflation numbers on owner-occupied housing, he said.
Summers noted that most people estimate the ...