Former Treasury Secretary Larry Summers filed a warning Wednesday about the inflation threat under the Trump administration after discovering that inflation rates had risen unexpectedly in January.
“We are currently at the most dangerous time of inflation policy since the early Biden administration,” he said, serving as Secretary of the Treasury under President Clinton and directing the National Economic Council under President Obama. Summers wrote in his post Wednesday.
“There will be no tariffs, no immigration restrictions, no deficit bloating, no attacks on the Fed, and there will be serious grounds for inflation concerns,” he wrote.
Trump is sacrificing new tariffs on imports while threatening major tariffs in Canada and Mexico. He also sought to increase the number of deportations from the United States.
Summers cited the rise in the Consumer Price Index (CPI) report as a reason for the uncertainty. The CPI has risen by 0.5 points since December.
“Another unfavorable CPI report. Summers said that both real and core inflation have risen faster than 5% last month.
“There are issues ahead of the new policy, as expectations are rising sharply, unemployment rates falling beyond its potential.”
He predicted that the second Trump presidency would have a negative impact on consumers' ability to purchase goods from overseas, and that inflation would rise.
