Summers, who called out the last round of massive inflation in the U.S.: Trump will trigger an "inflation crisis not seen in decades"

Renowned economist and former U.S. Treasury Secretary Larry Summers offered a suggestion to President-elect Trump from afar: do not keep campaign promises—unless you want to see prices soar again.

On Wednesday local time, Summers stated in a media interview that if Trump insists on fulfilling the promises made during the campaign, the U.S. will face a more severe inflation shock than in 2021. This could mean double-digit inflation.

In 2021, Summers accurately predicted the last round of inflation in the U.S. At that time, he warned that the Biden administration's pandemic stimulus plan was inflationary, and the $1.9 trillion American Rescue Plan would create excess demand and lead to an overheated economy.

The Biden administration ignored Summers' warnings, believing that inflation was merely "transitory." What happened afterward is well known; U.S. inflation surged, reaching a 40-year high of 9.1% in June 2022.

Summers pointed out that several policies and actions proposed by Trump would lead to a resurgence of inflation, including tax cuts that could reach $10 trillion over the next decade, interference in Federal Reserve interest rate decisions, imposing comprehensive tariffs on imported goods, and large-scale illegal immigration deportation plans.

Summers expressed hope that Trump would learn from this term and adjust his plans to avoid causing inflation. If inflation returns, the Federal Reserve will not tolerate it.

The latest data released on Wednesday showed that after the Federal Reserve cut interest rates for the second consecutive time last week, the U.S. CPI rose to 2.6% in October, meeting expectations but reaching a three-month high. Summers also questioned the Federal Reserve at an event on Tuesday, stating, "My personal judgment is that the Federal Reserve and the market still underestimate the risk of overheating."

In response to Summers' suggestion, Trump's team made a statement.

Karoline Leavitt, spokesperson for Trump's transition team, stated in a statement that President Trump imposed tariffs during his first term, created jobs, stimulated investment, and did not lead to inflation. "President Trump will take swift action to restore and revive the economy by bringing back American jobs, lowering inflation, increasing real wages, cutting taxes, reducing regulations, and unleashing American energy, benefiting American workers."

Potential Treasury Secretary candidate and hedge fund executive Scott Bessent also dismissed inflation concerns. He stated:

"The idea that Trump would recreate an affordability crisis is absurd... He sees himself as the mayor of 330 million Americans, and he wants them to do well and have a great four years."