According to ChainCatcher, former U.S. Treasury Secretary Summers recently said on Bloomberg TV’s “Wall Street Weekly” program that “it’s a stupid game to get politicians involved” and “the end result is higher inflation and a weaker economy.”
Summers warned that any presidential influence on U.S. monetary policymaking would ultimately hurt the economy. Government officials "are always tempted to print more money, lower interest rates - to keep their foot on the gas pedal to boost the economy." This pressure raises expectations of inflation and pushes up long-term interest rates. Such actions by government officials only "increase inflation without any real increase in output."
As for the Fed's current policy decisions, Summers said any emergency rate cut would not be necessary "based on the facts as they stand," given that market volatility and stock market selling have eased since last Monday's turmoil.
However, Summers believes that at the September policy meeting, "a 50 basis point rate cut may be appropriate." (Jinshi)