Summers Says Fed May Need to Hike Rates Past 6%

Former Treasury Secretary Lawrence Summers says the Federal Reserve may need to raise interest rates to 6% or higher to bring inflation under control, given that the US economy is still running strong. He speaks to David Westin on Bloomberg "Wall Street Week."
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[hangender]

8% at least, given that's where inflation is at.

[Laborkei]

I think the Fed won't see any improvement with Inflation until they hit 9%.

[adrianvisentin]

Amateur. No need to raise rates further. Fed can just stop buying bonds.

[dannypowers]

The Fed has got to clear the balance sheet asap. 95 billion a month is peanuts.

[tvm]

I can't imagine why business channels continue to interview the architect of the 2008 world-wide financial contagion. Through persistent lobbying he eviscerated regulators and created massive risk in the system. On top of it he used his star status to label a respected economist as a Luddite, the same one who had raised an alarm about the huge risks of contagion.

[yilmazkurt]

Sorry but PCE inflation ratio almost stable for the last 3 months. Last 3 month annualized rate is about 2.5%. September PCE is 6.2% Unemployment rise 3.7 from 3.5%. % 5 FED rate would be enough but they need to keep it for one year which will shake the housing market.

[Mikesorrento]

Rates need to be higher than inflation rate. And we all know real inflation higher than official rate.

[frankbruno]

Ever week this guy goes up 5 now 6 next week 7

[thomaskauser]

SINCE WHEN DOES AUDITIONING TO REPLACE POWELL MEAN WEARING A VAN HEUSEN NO TIE

[maxdc]

Double digits interest rates are possible.

[brendansmith]

Larry has been right on all of this since August 2021. I fear 8 percent rates will happen and will cause huge problems. I also think very few central banks will follow a similar path and continue to suffer worsening inflation and runs on currency.

[Glowman_mike]

I think the fed needs to do a between meeting 1% increase to make markets wake up

[thomas]

Actually the population grows at 50, 000 people per month but the number of workers within the workforce has plateaued because our population is aging.

More consumers, fewer workers.

[petermerelis]

okay Larry, that's enough. time for a little vacation perhaps.

[julianschmahl]

This man has been right without fail each time

[praveenspike]

For Fed to pivot interest rates will reach around 9-10%, for BoE it will be around 5-6%. It all depends on the economy and market.

[Stopinvadingmyhardware]

He has the data correlated days after they just changed the rates.

[Twilight-pjvw]

Bad liar. Should hold body steadily. But eye contact is good.

[aaronsullivan]

Understand this about that. The FED 'says' they are raising rates. And the mechanics behind that is ‘they buy bonds’ to lower the rate, or ‘sell bonds to raise the rate’. They give a range, currently 3.75% to 4%.

But the truth of the matter is that the tail wags the dog. It's the bond market that sets the rate and that is dependent on RISK. Since risk is rising precipitously, the rate must rise, so the bond market is putting upwards pressure on rates as bond holders want to be compensated for the risk they are taking.

The FED then is capping rates. The FED will be there as the buyer of last resort, taking on the risk to prevent rates from accurately reflecting the risk to the system. The FED is not under rates pushing up…. They are on top pushing down.

The FED makes big announcements about raising rates, but in reality they are holding back the beast and announcing how much ground they will give up as they are put back on their heels.

Yesterday, the FED hit the PANIC BUTTON. The markets, bonds and stocks, were at the precipice edge. And the beast was going to push them over. So they hit the RED button and blew up the US dollar. Thus, the bond market was jumped to the top offering the Chinese full price for US assets which are junk and full of risk.

The rate plunged into the FED's announced range.

Will the FED pivot? Ha, they never moved in the first place, they are still QE ing. And they will QE X3 just to keep rates under 10%.

[jeffcann]

They should stop at 5% and shrink the balance sheet by $250 billion per month