Former Treasury Secretary Larry Summers on Wednesday offered a warning about inflationary threats under the Trump administration, after a new report found inflation rose unexpectedly to 3 percent in January.
“We are now in the riskiest period for inflation policy since the early Biden Administration,” Summers, who served as Treasury secretary under President Clinton and direction of the National Economic Council under President Obama, wrote in a Wednesday post.
“Even without tariffs, immigration restrictions, deficit bloat and attacks on the Fed there would be serious grounds for inflation worry,” he wrote.
Trump has imposed new tariffs on imports while threatening big tariffs on Canada and Mexico. He has 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 angst. The CPI rose by 0.5 points since December.
“Another adverse CPI report. Both actual and core inflation rising last month faster than 5 percent,” Summers outlined in a separate post.
“With inflation well above target, expectations rising sharply, growth above potential and unemployment declining, there is a prior problem even before new policy.”
He predicted a second Trump presidency would negatively influence consumers’ ability to buy goods from abroad and that inflation would rise.
