But somehow becomes vaguer about exactly how this is going to happen and show up, but he wants the Fed to stop it in its track, goshdarnit. This is in a column appearing in the Washington Post, May 25, “The inflation risk is real.”
Well, he does start out by saying that the economic recovery from the pandemic is a good thing, as is of course the the receeding of the pandemic itself, with the US doing well compared to “other industrial countries.” The fiscal and monetary policies supporting this have so far been a good thing, blah blah blah. But now we must change course, especially the Fed, which Summers is still ticked off about not being appointed Chair of instead of Janet Yellen back when (both of his parents worked for the Philadelphia Fed, so, obviously he should have been put in charge of it, goshdarnit, quite aside from having Paul Samuelson and Kenneth Arrow as uncles!). It is not just ongoing easy monetary and fiscal policies involved here, but the “pentup demand” now roaring out that supposedly is going to race against supply responses for some long time into the future.
Oh, he does have some evidence. Indeed the rate of inflation has risen and to a level, 7.5% annual rate in the first quarter, and can quote various others who agree with him that inflation is in danger of getting seriously out of control, such as Warren Buffett, and can quote Jason Furman (who briefly co-blogged with some of us back on the old Maxspeak) that the fiscal stimulus is “too big for the moment.”