Sir, Lawrence Summers (“Less is more when it comes to decisions”, May 8) advises the Yellen Fed to be cautious, which is a bit like telling the Pope to be Catholic. Unfortunately, for the Fed it’s the wrong advice. The Fed has been too cautious and is now too predictable, helping to crush volatility; this will lead, in turn, to excessive risk-taking which, as with the subprime crisis and before that the dotcom boom and bust, will ultimately end in tears.

In a globalised world, with competition from foreign goods and labour constraining inflation, too-slack policy need not result in the speedometer registering worryingly fast inflation. But failing to note the temperature gauge of risk will surely lead to a seize-up sooner or later.

Paul Mortimer-Lee

Chief Market Economist,

BNP Paribas,

New York, NY, US

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