The U.S. unemployment rate must rise before Americans see any relief from inflation, economist and former Treasury Secretary Larry Summers said Monday.
U.S. inflation is sitting at roughly 8.6% year-over-year, the highest point in 40 years, and shows no signs of slowing down. Summers argues the U.S. must sustain a jobless rate of more than 5% for five years if inflation is to drop.
“We need five years of unemployment above 5% to contain inflation – in other words, we need two years of 7.5% unemployment or five years of 6% unemployment or one year of 10% unemployment,” Summers said in a London speech, according to Bloomberg.
“There are numbers that are remarkably discouraging relative to the Fed Reserve view,” he added.