#moneyMonetary

According to Odaily, former US Treasury Secretary Lawrence Summers recently expressed concerns on Bloomberg TV's 'Wall Street Week' about the detrimental effects of political involvement in monetary policy. Summers stated that allowing politicians to influence monetary policy is a 'foolish game' that ultimately leads to higher inflation and a weaker economy. He warned that any presidential influence on US monetary policy would harm the economy in the long run. Government officials, he noted, often push for more money printing and lower interest rates to stimulate the economy, which increases inflation expectations and raises long-term interest rates. Such actions, Summers argued, only exacerbate inflation without achieving substantial economic growth.

Regarding the current policy decisions of the Federal Reserve, Summers commented that given the recent market volatility and stock market sell-off, which have stabilized since last week's turmoil, an emergency rate cut is unnecessary 'based on the current facts.' However, he suggested that a 50 basis point rate cut might be appropriate during the Federal Reserve's policy meeting in September.