For many years, the nightmare for the US economy was a Japanese-style spiral of falling prices. Now, the risk for the White House is an economy that overheats, forcing the Federal Reserve to cool it down by raising interest rates so aggressively that it short-circuits the Biden boom, both on Main Street and Wall Street.
“The cruel thing about this is, once again, the little guy is being hurt,” Richard Fisher, former president of the Dallas Federal Reserve, told CNN Business.
Larry Summers, the Clinton-era Treasury secretary, is sounding the alarm on inflation via a series of increasingly urgent warnings.
In an op-ed titled “The inflation risk is real,” Summers wrote in the Washington Post Monday that overheating is now the “primary risk” facing the US economy. The former Obama official said the Fed may need to begin to tighten policy and urged the Biden administration to “move past emergency policies,” including addressing a growing shortage of workers.
Noting that inflation spikes “disproportionately hurt the poor” and are linked to diminished trust in government, Summers reminded progressives that inflation played a big role in electing Republican presidents in 1968 and 1980.
The good news is that the Fed, and many economists, expect prices to cool off after the initial shock of the reopening passes.
The bad news? There is no inflation playbook following a once-in-a-century pandemic. No one truly knows how “transitory” inflation will be.
Likewise Keep Collecting The Greenbacks ! ..Past The Kool- Ade Please !
Biden is only worried about nap time, the shots Dr Jill gives him, and more air time so he can be the clown he is.