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In article <t1cde1$2uq3r$119@news.freedyn.de>
<governor.swill@gmail.com> wrote:

Obama and Biden are both idiots. They flunked math.

‘The Fed is positioned as well as it can be — given the
credibility losses and mistakes that there have been — with
these remarks to manage things going forward.’— Larry Summers
Former U.S. Treasury Secretary Lawrence Summers handed out some
rare praise for the Federal Reserve on Friday, saying Fed chief
Jerome Powell’s latest pledge to restrain inflation was a
“statement of being resolute.”

See: Fed’s Powell says bringing down inflation will cause pain
to households and businesses in Jackson Hole speech

Shortly after Powell spoke at the annual central-bank symposium
in Jackson Hole, Wyo., Summers told Bloomberg that the Fed
chairman had done “what he needed to do” and that it was clear
the Fed’s “overwhelming priority” is pulling back inflation from
the fastest pace in four decades.

In a brief six-page speech, Powell signaled the Fed is likely to
keep raising interest rates and leave them elevated for a while
to stamp out inflation. He said restoring the annual inflation
rate to the 2% target is the central bank’s “overarching focus
right now” even though consumers and businesses will feel
economic pain.

Summers, a former chief economist at the World Bank, former
director of the National Economics Council, and former U.S.
Treasury secretary, as well as a former Harvard University
president, has repeatedly criticized the Fed for failing to spot
the recent surge in inflation and then acting too slowly to
tackle it.

For example, earlier this week Summers said that the Federal
Reserve is causing “confusion” among investors by avoiding a
clear declaration that unemployment is likely to rise during its
fight against inflation, according to the New York Post.

From the archives (June 2022): Here’s why Larry Summers wants 10
million people to lose their jobs

“The reality is that it’s probably not so realistic to think”
the Fed can “get inflation all the way down without unemployment
up — and they don’t want to acknowledge that,” Summers said a
week ago. “That forces a certain confusion into all of their
statements.”

The U.S. unemployment rate was just 3.5% through July, according
to the most recent jobs report. At present, the Fed projects
unemployment will reach just 4.1% by 2024, even as it implements
a series of sharp interest-rate hikes that will weigh on the
finances of U.S. firms.

Summers has argued that unemployment will have to rise to at
least 5% to successfully tackle inflation and has pointed out
that the U.S. stock and bond markets have rallied in recent
weeks in a sign that investors were not yet seeing the Fed’s
effort to cool the economy through tighter monetary policy as
restricting economic growth.

U.S. markets got the message Friday when stocks tumbled, with
the Dow Jones Industrial Average DJIA, -3.03% closing down more
than 1,000 points for its worst daily percentage drop since May,
with focus on the Powell vow that the central bank would
continue its battle against inflation until the job — of getting
the annual rise in the U.S.’s cost of living back to its 2%
target — “is done.”

See: ‘There’s no Fed pivot’: Wall Street finally gets the
message as stocks swoon after Powell speech

After Powell’s speech at Jackson Hole, Summers praised Powell’s
acknowledgment that there will be a price to pay for cooling
inflation, noting short-term hits to employment and wages were
acceptable for ensuring long-term prosperity.

Powell had “prioritized inflation, making clear that he
recognized that that prioritization would have short-term
adverse consequences that wouldn’t be easy,” Summers said,
adding that the central bank was now as well-positioned as it
could be given the errors committed, in his view, in the recent
past.

See also: Inflation falls for first time in more than two years,
key U.S. gauge shows, due to sinking gas prices

The former Treasury chief said European Central Bank President
Christine Lagarde has “a much harder job” than Powell given the
euro area’s inflation, energy-price shocks and regional
political problems.

“It’s going to be a very difficult road for them to walk in
Europe,” Summers said. “My suspicion would be that they’re going
to have to raise rates more than is currently priced in, but
that’s going to come at a time when there’s very substantial
recessionary forces.”

Like now?

https://www.marketwatch.com/story/powell-did-what-he-needed-to- do-in-jackson-hole-larry-summers-says-11661602682

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