{"id":1149752,"date":"2021-12-24T09:19:44","date_gmt":"2021-12-24T14:19:44","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1149752"},"modified":"2021-12-24T09:19:46","modified_gmt":"2021-12-24T14:19:46","slug":"top-obama-economic-adviser-fears-recession-says-federal-reserve-was-too-late-on-addressing-inflation","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/top-obama-economic-adviser-fears-recession-says-federal-reserve-was-too-late-on-addressing-inflation\/","title":{"rendered":"Top Obama Economic Adviser Fears Recession, Says Federal Reserve Was Too Late On Addressing Inflation"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">30<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Ftop-obama-economic-adviser-fears-recession-says-federal-reserve-was-too-late-on-addressing-inflation%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1149752&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>A top Democratic economist fears that the United States has produced an inflationary environment that will require a recession to escape.<\/p>\n<p>Larry Summers \u2014 who worked as Treasury Secretary under the Clinton administration and National Economic Council director under the Obama administration \u2014 said during an interview with <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2021-12-23\/summers-sees-risk-of-recession-soon-secular-stagnation-later\">Bloomberg<\/a> that the Federal Reserve\u2019s recent monetary policy taper came far too late.<\/p>\n<p>\u201cIf I thought we could sustainably run the economy in a red-hot way, that would be a wonderful thing, but the consequence \u2014 and this is the excruciating lesson we learned in the 1970s \u2014 of an overheating economy is not merely elevated inflation, but constantly rising inflation,\u201d Summers said. \u201cThat\u2019s why my fear is that we are already reaching a point where it will be challenging to reduce inflation without giving rise to recession.\u201d<\/p>\n<p>\u201cI\u2019m surprised by how low long-term interest rates are,\u201d Summers continued. \u201cMarkets are foreseeing that we will do what\u2019s necessary to contain inflation \u2014 and that process will be quite contractionary.\u201d<\/p>\n<p>Summers also pointed to the harmful effects of inflation upon the middle and lower classes.<\/p>\n<p>\u201cThere are no examples of successful inflationary policy that has worked out to the benefit of workers,\u201d he said, referring to efforts in the United Kingdom and United States in the 1970s, along with similar campaigns in Latin America. \u201cIt backfired with respect to the very people it was trying to help.\u201d<\/p>\n<p>Summers fears \u201csecular stagnation\u201d \u2014 a scenario in which economic growth rates are reduced and interest rates are lower than historic norms \u2014 may threaten the United States in the long-term.<\/p>\n<p>\u201cI\u2019m really not sure what\u2019s going to come after this current episode,\u201d he said. \u201cI\u2019m certainly not confident that we\u2019re going to have sustained excess demand for many years. The challenge is that we\u2019ve pumped up aggregate demand now, and then who knows how we\u2019re going to work our way through back to more levels of demand.\u201d<\/p>\n<p>To stimulate the economy after COVID-19 and the lockdown-induced recession, the Federal Reserve pegged a near-zero target interest rate and began buying $120 billion in assets each month. In November, policymakers <a href=\"https:\/\/www.dailywire.com\/news\/as-high-inflation-persists-federal-reserve-unveils-first-official-plan-to-roll-back-stimulus\">unveiled<\/a> the first step in diminishing monetary stimulus \u2014 slashing bond purchases by $15 billion in both November and December. More recently, the central bank <a href=\"https:\/\/www.dailywire.com\/news\/federal-reserve-releases-plan-to-more-urgently-address-high-inflation\">said<\/a> that its asset purchase program would be rolled back faster.<\/p>\n<p>Beyond the Federal Reserve, Summers recently <a href=\"https:\/\/twitter.com\/LHSummers\/status\/1470395480056250370\">explained<\/a> on social media that he \u201ccannot understand\u201d why White House officials \u201ccling to the idea that inflation is caused by bottlenecks\u201d and \u201cwill soon recede to normal levels.\u201d<\/p>\n<p>\u201cGiven housing prices and tightening labor markets, there is no compelling reason to expect major deceleration in inflation,\u201d he said. \u201cBut, even if inflation subsided to .2 percent a month, the annualized inflation rate would be 6.5% in March 5.1% in June and 4.0% before the election in September.\u201d<\/p>\n<p>Price levels are continuing to rise in the United States. According to the Bureau of Economic Analysis, the Personal Consumption Expenditures Price Index \u2014 which the Federal Reserve uses to inform monetary policy decisions \u2014 <a href=\"https:\/\/www.dailywire.com\/news\/the-feds-favorite-inflation-measure-hits-three-decade-high\">hit<\/a> a year-over-year rate of 4.1% in October. More recently, the Bureau of Labor Statistics <a href=\"https:\/\/www.dailywire.com\/news\/breaking-inflation-skyrockets-to-6-8-higher-than-expected-fastest-rate-in-nearly-40-years\">revealed<\/a> that the Consumer Price Index is rising at a 6.8% clip \u2014 the largest year-over-year increase since June 1982.<\/p>\n<p>The Daily Wire is one of America\u2019s fastest-growing conservative media companies and counter-cultural outlets for news, opinion, and entertainment. Get inside access to The Daily Wire by becoming a <a href=\"https:\/\/www.dailywire.com\/subscribe\">member<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A top Democratic economist fears that the United States has produced an inflationary environment that will require a recession to escape. Larry Summers \u2014 who worked as Treasury Secretary under the Clinton administration and National Economic Council director under the Obama administration \u2014 said during an interview with Bloomberg that the Federal Reserve\u2019s recent monetary &#8230;<\/p>\n","protected":false},"author":99,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1149752","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1149752","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/99"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1149752"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1149752\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1149752"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1149752"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1149752"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}