Top Obama Economist: ‘Quite Unlikely That Inflation Will Recede Back To Its Normal’ Rate

Larry Summers, who served as Treasury Secretary under former President Bill Clinton and director of the National Economic Council under former President Barack Obama, warned during a CNN interview late last week that it was unlikely that inflation rates would return to normal any time in the near future.

“Given that you were worried about this before almost anybody else, and given that now you have got all these CEOs saying it’s going to go a year, maybe even past that, right, at that point, it wouldn’t be transitory,” CNN host Erin Burnett said. “How long do you think inflation is going to go up?”

“I think the odds are that we’re going to have inflation of a kind we haven’t seen in 30 years, until either the Fed takes some significant move with respect to monetary policy, or until there’s some kind of accident that disrupts the economic growth we’re enjoying,” Summers responded. “I think it’s possible but quite unlikely that inflation will recede back to its normal 2 percent level without some significant change in the path we’re now — we’re now on. I think the Fed has made a significant mistake in the approach that it’s taking by doubling down on the massive fiscal stimulus we had at the beginning of the year with really easy monetary policy.”

BURENTT: OUTFRONT now, Larry Summers, who was treasury secretary for former-President Bill Clinton and director of the National Economic Council under President Obama. And, of course, secretary, you have been warning for months about the threat of inflation. In fact, since the very beginning of this year, when the administration said that — that — that that was, you know, crazy talk. And you ended up being right.

So, you hear all these CEOs and, Larry, you hear them. I mean, you know, I played three. You know, as you know, I could give you 30, right? Given that you were worried about this before almost anybody else, and given that now you have got all these CEOs saying it’s going to go a year, maybe even past that, right, at that point, it wouldn’t be transitory. How long do you think inflation is going to go up?

LARRY SUMMERS, FORMER DIRECTOR, NATIONAL ECONOMIC COUNCIL UNDER PRESIDENT OBAMA: I think the odds are that we’re going to have inflation of a kind we haven’t seen in 30 years, until either the Fed takes some

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