Larry Summers, the American economist and former U.S. Treasury Secretary, believes that should the U.S. Federal Reserve refrain from increasing the benchmark interest rate this month, a half-point rate hike may be necessary for July. As per the CME Fedwatch tool, there is a 74% likelihood that the Fed will not raise the rate at the Federal Open Market Committee (FOMC) meeting on June 14.
Larry Summers Stresses Need for Vigilance, Suggests Half-Point Rate Hike in July if Fed Skips at June FOMC Meeting
Larry Summers has voiced numerous concerns about the present condition of the U.S. economy. During an appearance on Bloomberg Television this week, he expressed uncertainty due to persisting risks. “We are again in a situation where the risks of overheating the economy are the primary risks that the Fed needs to be mindful of,” Summers informed Bloomberg TV host David Westin on Friday.
The general consensus is that no change in the federal funds rate will be established during the upcoming FOMC meeting. According to the CME Fedwatch tool , there is a 74.7% probability that no alteration to the rate will occur on June 14, while only 25.3% of the market anticipates a possible rate hike. If no increase materializes this month, as per market expectations, Summers suggests the Fed may need to compensate for this pause.
“If they don’t raise rates in June, I think they have to be open to the possibility that they may have to raise rates by 50 basis points in July if the economy continues to stay way hot and if inflation figures are robust,” Summers expounded.

Summers has criticized the Federal Reserve frequently; in 2021, he raised alarms about uncontrolled inflation. Addressing Aspen Security Forum last year, he noted there was more than a 50% chance that an economic slump could start in 2023. However, during his conversation with Westin, he theorized a potential recession could be postponed until 2024 by stating: “I think the Fed will end up doing enough to restrain inflation, that’s going to mean a quite soft economy sometime in 2024.”
The former Treasury authority added:
We’ve still got a tight, hot labor market.
On June 2, the U.S. Bureau of Labor Statistics (BLS) announced a significant increase of 339,000 new nonfarm payroll jobs in the previous month, exceeding forecasts of a mere 190,000 job growth for May. Despite this rise, many industry experts question the legitimacy of the BLS data.
“Remember all of those articles about strong jobs and wages are why the Fed has been raising rates?” Wall Street Silver’s Twitter account inquired . “It was all fake. The BLS revisions show a MASSIVE decline in the data since Q4 2022. All of the data has been faked,” it concluded.
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