Larry Summers says markets are wrong to think things will return to normal

Former Treasury Secretary Larry Summers has said that markets are wrong to think things will return to normal.

He stated with Bloomberg that: "I suspect tumult."

He added: "This is going to be remembered as the year when we recognized that we were heading into a different kind of financial era with different kinds of interest rate patterns."

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In December, he said: “We have a long way to go to get inflation down” to the Fed’s target, Summers told Bloomberg Television. As for Fed policymakers, “I suspect they’re going to need more increases in interest rates than the market is now judging or than they’re now saying.”

“Six is certainly a scenario we can write,” he said regarding the peak percentage rate for the Fed’s benchmark. “And that tells me that five is not a good best guess.”

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