Former US Treasury Secretary Summers Comments on Fed's Monetary Policy

According to Odaily, former US Treasury Secretary Lawrence Summers has commented on the Federal Reserve's actions regarding inflation and interest rates. Summers acknowledged that the Fed's delayed response to the inflation surge in 2021 was a significant misstep in its monetary policy history. However, he noted that the Fed eventually implemented sufficient measures to correct the economic situation. Summers stated that the Fed's decision to cut interest rates during its September meeting was appropriate. Nonetheless, he emphasized the need for caution regarding the medium-term outlook of monetary policy. He expressed skepticism about the Fed's ability to significantly lower interest rates over the next two years, contrary to market expectations. The derivatives market indicates that traders anticipate the Fed will reduce the benchmark interest rate to around 3% within the next two years. Currently, the target range for the benchmark rate is between 5.25% and 5.5%.