There was a time when former Harvard head and Democratic administration darling, Larry Summers, would draw out a crowd at every public appearance. Those days are gone, however, and now the formerly corpulent cogitator is forced to resort to Twitter for his rants, such as the one he unleashed early this morning when in “tweetstorm” of 11 consecutive tweets he slammed Yellen for even daring to think about tightening, and why a rate hike in September, or any other month, would be a big mistake.
This is what he said:
There are many reasons, each of which would be reason enough alone, for the Fed not to raise rates today 1/11
— Lawrence H. Summers (@LHSummers) September 21, 2016
The Fed should not raise rate because total hours worked in US are flat to down over last 6 months 2/11
— Lawrence H. Summers (@LHSummers) September 21, 2016
The Fed should not raise rates because inflation expectations are falling not rising 3/11
— Lawrence H. Summers (@LHSummers) September 21, 2016
The Fed should not raise rates because in the 8 year of recovery it should be targeting inflation above 2% so inflation averages 2%. 4/11
— Lawrence H. Summers (@LHSummers) September 21, 2016
The Fed should not raise rates because it lacks the tools to respond if a downturn comes 5/11
— Lawrence H. Summers (@LHSummers) September 21, 2016
The Fed should not raise rates because it will come as a shock at a fragile moment 6/11
— Lawrence H. Summers (@LHSummers) September 21, 2016
Fed should not raise rates b/ the economy is sign. weaker & inflation expectations weaker than when it erred (judged expost) last Dec. 7/11
— Lawrence H. Summers (@LHSummers) September 21, 2016
Fed should get off the idea credibility requires raising rates now, Dec or at any point b4 inflation expectations are accelerating. 8/11
— Lawrence H. Summers (@LHSummers) September 21, 2016
There are much better ways than rate increases for dealing with any concerns about bubbles 9/11
— Lawrence H. Summers (@LHSummers) September 21, 2016
The Fed should take on board that with the economy so slow over the last 3 quarters rates may not be below neutral now. 10/11
— Lawrence H. Summers (@LHSummers) September 21, 2016
Tightening now will induce artificial dollar strength, which is hardly a good thing given the magnitude of protectionist pressures 11/11
— Lawrence H. Summers (@LHSummers) September 21, 2016
While we are curious what Summers’ recommendation would be to burst the unprecedented cross-asset bubble without a rate hike, we are confident that Larry has no reason for concern: this time the Fed will “listen to you”, because unless Yellen wants to unleash a fiasco in the market which has put odds for a September hike in the teens, there will be no hike in 5 hours.
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