After the latest inflation figures dashed hopes of an inflation peak, Mr Summers, the former US Treasury secretary, said the Fed had not admitted that it had made a mistake or was aware of the damage to its credibility.

"inflation peaking, like the 'temporary' theory, is clearly wrong," Mr Summers said. The Fed's March forecast that inflation would fall to the 2% range by the end of the year, frankly, was released as a fantasy, and today it looks even more absurd. "

Mr Summers made the comments after the latest data showed that US inflation rose to 8.6 per cent in May, a 40-year high and higher than expected.

"what the Fed is saying is right now, but I don't think they understand the damage caused by the mistakes made last year and early this year," Mr Summers said. "these mistakes mean that they have no credibility at all. "

Given the time lag between the Fed's action and its effectiveness, "delays in tightening will do some real damage", Mr Summers said.

Debate on the extent of interest rate increase

Fed policy makers have sent a message that they are prepared to raise benchmark interest rates by 50 basis points at a time in June and July. Vice Chairman Brainard also hinted last month that she doubted there would be any reason to suspend the rate hike in September.

"the focus of the debate is whether we need to raise interest rates by 25 or 50 basis points in two months' time," Summers said. "I think a more productive discussion should be between 50 and 75 basis points. "

Summers urged the Fed to study why officials' forecasts made "so obvious" mistakes and repeated them. The problem he identified was that the Fed's forecasts were homogeneous and criticized the Fed's main mathematical model.

Further inflation

The former finance minister warned that the main component of the consumer price index could accelerate in the coming months. Housing costs are likely to rise by 8% later this year. Medical services still "look low," he said.

Summers reiterated that "a soft landing is by no means easy," meaning that the Fed lowers inflation without triggering a recession.

He does not approve of an emergency increase in interest rates before the scheduled meeting on Wednesday. That "looks panicked and is by no means a wise move. "