Former Treasury Secretary Larry Summers has warned that the Federal Reserve might not tighten its monetary policy as much as the market expects, potentially putting the market at risk of entering a bubble. What Happened: Summers, speaking to Bloomberg, pointed out that despite the Fed’s efforts to combat inflation by raising interest rates by 525 basis points, the U.S. economy remains robust, reported Business Insider. Summers suggested that the neutral interest rate, a level that neither hinders nor stimulates economic growth, has almost doubled from around 2.5% to 4%. This indicates that the…
