TIP - Larry Summers Warns Donald Trump's Fiscal Policy Could Inflict More Damage Than One That Precipitated Great Depression: 'Prescription For The Mother Of All Stagflations' | Benzinga
Former Treasury Secretary Larry Summers on Friday said he hasn’t seen a more inflationary economy policy than that of presumptive presidential candidate Donald Trump in his lifetime, calling it an “irresponsible set of proposals.”
Biggest Supply Shock: Trump’s tariff proposals are the biggest supply shock that will likely push up prices of not just imported goods but all of goods that compete with those imported, Summers said in an interview with Bloomberg.
“Anybody who’s worried about gouging should think that more competition, including from abroad, is a very, very important step,” he said.
Summers noted that Trump’s plans for greater labor restrictions will likely cause wage inflation, and scaling back renewable energy subsidies will increase energy costs. This, the economist said, will significantly increase inflation and inflation expectations, putting more pressure on the Fed to prove its credibility.
“This could easily be a prescription for a 10% mortgage rate,” he said, adding that “this is ...