Home » Former U.S. Treasury Secretary warns of increased risk of a hard landing for the U.S. economy due to ineffective Fed interest rate hikes

Former U.S. Treasury Secretary warns of increased risk of a hard landing for the U.S. economy due to ineffective Fed interest rate hikes

by admin

Former U.S. Treasury Secretary Lawrence Summers has expressed concerns over the Federal Reserve’s interest rate hikes and warned of an increased risk of a hard landing for the U.S. economy. According to a Bloomberg report, Summers stated that the U.S. employment situation last month showed that the interest rate hikes had not been effective and had instead exacerbated the risks for a hard landing.

In an interview with Bloomberg Television, Summers mentioned that the risk of a hard landing appeared to be growing as job growth accelerated. He suggested that interest rates may not be as influential as they once were in guiding the U.S. economy. This implies that when the economy requires cooling down, interest rates would have to be more volatile than in the past. Summers also expressed concerns about the ongoing sell-off in the bond market and rising valuations in various markets, including private equity, which he believes are putting the U.S. economy in a vulnerable position.

Summers highlighted that the Federal Reserve’s monetary tightening actions over the past year and a half, which raised interest rates by more than 5 percentage points, did not bring the U.S. unemployment rate within a reasonable range. He argued that this indicated a fundamental shift in the effectiveness of the Fed’s policy.

It is worth noting that the article concludes with a copyright statement and disclaimer. The copyright statement indicates that the article is exclusive to the Xinhua Newspaper Network and cannot be reproduced without permission. The disclaimer clarifies that the views expressed in the article are solely those of the author and have not been confirmed by the Xinhua Newspaper Network. The disclaimer also absolves the site from any responsibility regarding the authenticity, completeness, and timeliness of the article, urging readers to verify the content independently.

You may also like

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy