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MNI BRIEF: Summers Says U.S. Overheating a 'Primary Risk'


Asset price inflation and much tighter labor markets should cause the Fed to reassess its strategy, the ex-Treasury Secretary says.

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Ex-Treasury Secretary Lawrence Summers said Tuesday the Federal Reserve is making a mistake by promising to keep interest rates low for several years now that the budget deficit has increased sharply.

"The primary risks today involve overheating, asset price inflation, excessive leverage and subsequent financial instability," he said, adding that labor markets are much tighter than many assume.

MNI has reported the Fed is aware of the bubbles it has helped spur but is willing to look through them in order to fully meet its price stability and full employment goals.