Summers warns of Trump-Fed risks

Former Treasury Secretary Lawrence Summers warned that US President Donald Trump’s interference in the Federal Reserve policymaking could sharply raise inflation expectations.

In an interview with Bloomberg TV today, July 17, Summers said no credible economist supports cutting rates to around 1% in the current environment.

He noted that Trump’s push for such a move could trigger a significant psychological shift in inflation prospects. Moreover, any resulting economic boom would likely be short-lived.

Summers added that the market turbulence on July 17 was a small example of the fallout from the monetary policies favored by Trump.

Wall Street experienced volatility after reports emerged that Trump intended to oust Fed Chair Jerome Powell, though the former quickly denied such claims.