Bloomberg/Chris Anstey/1-7-2022
“My own view is that the Fed and the markets are still not recognizing what’s likely to be necessary. The market judgment and Fed’s judgment is that you can somehow contain this inflation without rates ever rising above 2.5% in terms of the fed funds rate.” – Larry Summers, former Secretary of the Treasury
USAGOLD note: Summers continues to channel Paul Volcker on stemming the inflationary tide, but, as he points out, the Fed is not all that interested in an aggressive policy stance at this juncture. Keeping a lid on rates amounts to keeping the real rate of return deeply in the negative – a circumstance likely to keep gold demand running at a high level. What the press touts as a hawkish policy, Summers sees as not very hawkish at all.
