“I’m not sure the inflation figures over the next two years are going to be quite as favorable as the market is expecting — especially in light of the geopolitical risks around oil and some other commodities,” the former Treasury chief said.
Summers also reiterated his concerns about rising US borrowing needs.
“There’s a very profound question of how long the world’s greatest debtor will remain the world’s greatest and most secure power,” he said.
Recognition of the need for fiscal discipline might have been masked “because we’ve been for the last 15 years in an era of low interest rates,” he said. But now “that’s kind of changing with what has happened with the 8% mortgage rate.”
This article was provided by Bloomberg News.