On June 16, former U.S. Treasury Secretary Summers said that the slightly contradictory actions of Fed policymakers this week seemed to be influenced by their internal politics.
“I find the Fed’s actions a little puzzling,” Summers said in an interview.
Summers said the Fed’s case for not raising rates was inconsistent with its outlook for two rate hikes before the end of the year and boosted growth forecasts.
Summers said that in addition to a consistent and coherent reading of the economic situation, the meeting also felt swayed by political dynamics within the Fed.
This is slightly disturbing. For his part, Summers said the Fed may have to maintain a more restrained stance in policy given the strong evidence from the U.S. economy.