Lawrence Summers, Barack Obama's former treasury secretary, warned of a "serious inflation problem" with a short thread about his concerns on Twitter.
Summers, who served as secretary of the treasury during the Obama administration from 2009-2011, bluntly assessed the inflation situation in the United States.
In a series of tweets, Summers laid out why the latest CPI numbers are an ominous sign.
The year-over-year inflation rate sits at 8.3%, while the month-to-month rate ticked up 0.1%.
The news came on the same day the Biden administration hosted a White House lawn ceremony to hail the passage of the Inflation Reduction Act.
In March 2021, Summers warned of the possible inflationary impact of the American Rescue Plan. And he cited a troubling statistic about median inflation.
Summers thinks getting inflation back to 2% would require the Federal Reserve to raise the federal funds rate to 4%. It is currently 2.5%.
Larry Summers, president emeritus of Harvard University, speaks during a discussion on “A Reform Agenda for Europe’s Leaders” during the World Bank/IMF annual meetings in Washington Oct. 9, 2014. (REUTERS/Joshua Roberts / Reuters Photos)
The Federal Open Markets Committee will meet later in September. The anticipation is the body will raise interest rates by another 75 basis points.