 Janet L. Yellen, chair of the U.S. Federal Reserve, during a news conference following a Federal Open Market Committee (FOMC) meeting in Washington on June 14, 2017. Federal Reserve officials forged ahead with an interest-rate increase and additional plans to tighten monetary policy despite growing concerns over weak inflation. (Andrew Harrer/Bloomberg News) By Lawrence H. Summers While I do not believe the Fed made a serious mistake Wednesday in raising rates, I believe that the "preemption of inflation based on the Phillips curve" paradigm within which it is operating is highly problematic. Much better would be a "shoot only when you see the whites of the eyes of inflation" paradigm of the kind I have advocated for the past several years. Such a paradigm would be more credible, more likely to result in the Fed's satisfying its dual mandate, reduce risks of recession, and increase the economy's resilience when recession comes. Many of my friends have recently issued a statement asserting that the Fed should change its inflation target. I suspect, for reasons I will write about in the next few days, that moving away from inflation targeting to something like nominal gross domestic product-level targeting would be a better idea. But I think that this issue is logically subsequent to the question of how policy should be made in the near term with the given 2 percent inflation target. Five points frame my doubts about the current approach. First, the Fed is not credible with the markets. Read the rest on Wonkblog.
Chart of the day Republicans and Democrats are not getting along as well as they used to -- to the point where many of them say they wouldn't want their children marrying someone from the other party. Christopher Ingraham has more. | 
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