Former U.S. Treasury Secretary: A 50 basis point rate cut in September may be appropriate

Former US Treasury Secretary Summers recently said on Bloomberg TV's "Wall Street Weekly" program, "It's a foolish game to involve politicians," and "the ultimate result is higher inflation and weaker economy."Summers warned that any president's influence on US monetary policy formulation would ultimately harm the economy. Government officials "always want to print more money, lower interest rates - step on the gas to boost the economy." This pressure increases people's expectations of inflation and pushes up long-term interest rates. Such practices by government officials will only "exacerbate inflation without substantive growth in output."As for the current policy decisions of the Federal Reserve, Summers said that given the market volatility and the easing of stock market sell-offs since last Monday's turmoil, "based on current facts," any emergency interest rate cut is unnecessary.However, Summers believes that at the September policy meeting, "a 50 basis point rate cut may be appropriate." (Jinshi)