BlockBeats reported that on August 26, former U.S. Treasury Secretary Larry Summers stated that the political pressure and personal attacks against Federal Reserve Governor Lisa Cook are 'unprecedented,' and anyone who cares about the independence of U.S. institutions should be alert.
Summers warned that this pressure would have a gradual corrosive effect on the market framework and could even trigger what he refers to as the 'Argentinization' risk in the United States. Note: 'Argentinization' refers to economic turmoil caused by populist policies and political intervention, characterized by high inflation, currency devaluation, and institutional failure, similar to Argentina's economic crisis from the 1950s to the 1980s.
Summers has been a sharp critic of the Trump administration's policies. He has criticized the recently passed (Build Back Better Act), pointing out that the act may spawn another financial crisis by increasing debt obligations. He also condemned current Treasury Secretary Yellen's public intervention in interest rate policy but praised Powell's response.
