Watch: Ex-U.S. Treasury Secretary Larry Summers warns of complacency on inflation

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Jan. 20 (UPI) — Former U.S. Treasury Secretary Larry Summers cautioned central banks and policymakers Friday that they need to complete the job of bringing down inflation.

Speaking at the World Economic Forum in Davos, Switzerland, Summers said it would be the ”greatest tragedy” if governments faltered in their battle against a surge in inflation, which has been battering economies around the world in recent months.

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Summer’s warning comes as recent data point to a slowdown in inflation would pave the way for central bankers to wind down their policy of aggressive inflation-busting hikes in interest rates.

He said economists and policymakers at Davos were experiencing an “exhilaration of relief” but cautioned against complacency.

“Hyperpopulists lost elections and accepted their defeat, Europe has not frozen, recession has not come, China has adjusted its policies toward the world and inflation has decelerated. Those are all positive things and reasons why we should feel better than we felt a few months ago.

“Relief must not become complacency,” Summers, who is now a Harvard University professor, told a CNBC panel at the summit.

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The greatest tragedy, Summers said, would be if central banks lurched away from focusing on price stability prematurely and the battle against inflation had to be fought twice.

Summers served as the United States’ 71st treasury secretary, from 1999 to 2001 and as director of the National Economic Council from 2009 to 2010.