Former US Treasury Secretary Summers said technical factors could play a role in the recent bond market rally and warned that the market may have underestimated the risk of inflation.
Treasury yields fell sharply last week as investors thought global economic growth might have peaked and the rise in inflation could be temporary.
Former US Treasury Secretary Summers said in an interview that recent trends may have been driven by "a variety of technical factors", including "a reduction in US Treasury accounts and the unwinding of speculative positions".
The G-20 finance ministers and the G-20 finance ministers held in Venice.On the sidelines of the central bank governor's meeting, Summers said the market did not have a good record in predicting future price increases. "in the past, when inflation accelerated significantly, such as in the 1960s, the market lagged behind expectations," he said. "
Yields on 10-year Treasuries soared earlier this year on expectations that massive fiscal stimulus, the launch of vaccines and a strong recovery from the COVID-19 epidemic would restart long-stagnant price rises.
Summers has been warning of the risks of inflation, writing on his website in May that "the main risks for the U.S. economy are overheating and inflation."
He wrote that the Fed and other policy makers should recognize that "the main risk to the economy in the near term is overheating, not overweakness."