'This really disturbs me to say this': inflation dove Paul Krugman agrees with hawk Larry Summers on the Fed's path ahead
At least for now, the economists agree that the Federal Reserve is walking a fine line, where the risk of raising rates too high is equal to the risk of not raising them high enough. the inflation dove Krugman concurred with an earlier statement from his more hawkish counterpart.the Fed needs to keep its foot on both the breaks and the gas at the same time to navigate an"economy where things could go either either way," comparing it to driving a car"on a very, very foggy night.
He elaborated by contributing his own metaphor to explain how the Fed is trying to balance seemingly equal risks:"We're trying to operate the controls on some fairly sensitive machinery, in the dark, wearing mittens." Previously, both economists have been on opposing sides. Summers, a former Treasury secretary, was among the first to warn that the Fed wasn't taking enough action as inflation began to soar and continued to beat the drum that policymakers needed to get more aggressive on rates. in fighting inflation, causing unnecessary economic damage.
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