<p>On Monday, Larry Summers, a former top economic adviser to President Barack Obama, pushed back on remarks that Treasury Secretary Janet Yellen made on Sunday where she dismissed Summers&#8217; concerns over inflation.</p>
<p>Yellen, appearing on CNN&#8217;s &#8220;State of the Union&#8221; with host Jake Tapper, was asked to respond to these recent remarks from Summers:</p>
<blockquote><p><em>Now we see inflation becoming more widespread in a wider range of products, spreading to the housing and labor markets. I have been alarmed for a long time, and I&#8217;m more alarmed now. &#8230; We&#8217;re in more danger than we have been during my career of losing control of inflation in the U.S.</em></p></blockquote>
<p>When Tapper asked Yellen if she thought that Summers was wrong, Yellen responded, &#8220;I think he&#8217;s wrong, I don&#8217;t think we&#8217;re about to lose control of inflation.&#8221;</p>
<p>&#8220;I agree, of course, we are going through a period of inflation that&#8217;s higher than Americans have seen in a long time,&#8221; she added. &#8220;And it&#8217;s something that&#8217;s obviously a concern and worrying them. But we haven&#8217;t lost control.&#8221;</p>
<p>Summers responded to Yellen in a series of tweets on Monday afternoon, saying, &#8220;She expresses confidence that inflation is decelerating and will be back to target levels by the end of next year. I hope she is right but I think it’s much less than a 50/50 chance.&#8221;</p>
<p>&#8220;I began my career when Paul Volker was taking over at the Fed and not since then have I been more worried. I am curious at what point in the last 40 years Treasury thinks the risk of an inflation spiral are greater than they are now,&#8221; Summers said. &#8220;When the Administration formulated its budget in February, it expected 2 percent inflation in 2021, I was warning about inflation. Their forecast is no longer operative. In May and June, @SecYellen expressed confidence that inflation would be back to the 2 percent range by late 2021 or early 2022. Now, this forecast is no longer operative.&#8221;</p>
<p>&#8220;In @CNN interview, @SecYellen asserts twice that inflation has decelerated. This is a bit misleading as the 3-month and 12-month CPI inflation rates are both around 5 percent on an annual basis,&#8221; Summers continued. &#8220;And the trimmed mean and median inflation rates that exclude aberrant sectors (which used to be a stable of Administration&#8217;s rhetoric) are now accelerating. The TIPS market is suggesting inflation in 3 percent range over 5 years and more next year. Breakeven inflation over 5 years is up 40 bps in the last month. Expectations data are even more disturbing. This is part of why my alarm is increasing and Treasury should be as well.&#8221;</p>
<p>&#8220;Given lags in the indices, housing inflation is almost certain to soar in coming months. With super-tight labor markets, rising strike activity and real wages having declined, increases in wage inflation are likely as well,&#8221; Summers continued. &#8220;I actually believe the gap between Treasury &amp; Fed statements and the everyday experience of businesses and consumers in terms of inflation has widened in recent months. Until the Fed &amp; Treasury fully recognize the inflation reality, they are unlikely to deal with it successfully.&#8221;</p>

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Top Obama Economic Adviser Torches Biden Admin Over Skyrocketing Inflation: ‘My Alarm Is Increasing’

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Top Obama Economic Adviser Torches Biden Admin Over Skyrocketing Inflation: ‘My Alarm Is Increasing’