Sky high prices on just about everything are putting a strain on Americans as record-setting inflation continues to worsen. But just how long will it last?
Former U.S. Treasury Secretary Larry Summers, who correctly predicted unprecedented inflation a year ago, told Jim Braude on Greater Boston that it's going to be awhile.
When it comes to gas prices, Summers said, "I'd be surprised if we had a return to normal in the next year. I think we're going to have substantially elevated prices."
He added, "I think with respect to inflation, it's probably going to be with us for awhile. There are no miracle cures or silver bullets. Monetary policy, which what the Fed is doing, belatedly, does work with respect to inflation, but it takes quite a while."
A recession is likely, said Summers, which would mean "abnormally high" levels of layoffs and workers' 401ks trending down.
To control inflation and avoid a recession, Summers said it's important to raise interest rates, raise taxes, cut prescription drug prices, reduce tariffs on China and increase investments in energy.
"It's a thing we very much want to avoid. But, when you swing the pendulum too far in one direction, it often swings back hard, and I think that's a certain amount of what we've seen," Summers said.
Watch: Larry Summers on Washington “policy errors” that brought on inflation, and how long it will last
