Former U.S. Treasury Secretary Summers: The Fed has recovered from a "serious" inflation mistake

Former U.S. Treasury Secretary Summers said that although the Fed failed to act quickly to respond to the surge in inflation in 2021, hitting a "trough" in the history of its monetary policy, it ultimately did enough to correct the economy. "I have to give the Fed credit... Although it's not always clear, they've taken strong and forceful enough actions to keep inflation expectations stable." Summers said: "We all make a lot of mistakes, and it's important to recognize and correct them when you make them." However, while the former Treasury Secretary said that cutting interest rates at the Fed's September meeting was "the right thing to do," he believes that "we need to be more cautious about the medium-term outlook for monetary policy."