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Larry Summers says millions will have to be laid off to reduce inflation
The Federal Reserve is struggling to rein in rising prices by aggressively raising interest rates. When central bank policymakers meet in late July, they are expected to hike rates again, citing a three-quarters percent jump for the second time in a row.
Although Chairman Jerome Powell has said the Fed does not want to push the US economy into recession, that would be the lesser of two evils. Former Treasury Secretary Larry Summers, however, believes that only with mass unemployment can the inflation rate be brought down to the target level of 2%.
Doing calculations on the back of the envelope, he estimates that unemployment will have to exceed five percent for five years or ten percent for one year. That would mean around 10 million people made redundant.