bloomberg wall street week up ahead a little more than an hour from now the host of wall street week david westin joining us right now for our daily wall street week segment and you had a chance to sit down with the former treasury secretary larry summers and get his thoughts on some of the economic data we got exactly we had a big week with the imf and xm back but also remember the economic data that came out the cpi the ppa atlantic fed and even retail sales today and we asked larry basically does this indicate that in fact the fed may be winning its battle against inflation larry summers said not so fast i think its very hard to read david but i think i see some growing evidence of a stag but some real continuing concern about inflation as well thats a tough combination on the stag side it does look like defaults are rising it does look like the flow of credit is coming down headline retail sales were not strong although the internals are less are less clear so i think you have some grounds for concern about whats happening with real activity on a forward looking basis and the wall the cpi and the ppa numbers surprised a bit in a favorable direction you saw one year inflation expectations from the university of michigan pop up and the atlanta fed a wage tracker which i actually think is a better indicator of whats happening in the labor market than the monthly average hourly earnings that popped up a bit last month as well so i think were still looking at a very hard to read economy i dont see inflation as on a secure path down to the 2 percent target unless the economy turns or turns over a bit so i think the fed has very difficult choices ahead of it so larry let me make it even more complex perhaps and that is where we are with credit right now theres a lot of reports right now that credit standards are going up in the wake of those banks if i can call tremors that we had how do you factor that into that could that help the fed a bit really curtail some of the inflation look i dont know theres any question david but that some fed work is being done by tightening of credit tightening of credit to small and medium sized businesses tightening of credit certainly to not profitable technology companies tightening of credit very importantly to commercial real estate and some evidence that tightening of credit to consumers and automobile borrowers so theres definitely that effect the question is how large is it i thought prior to the tremors in the banking system that there was a chance the fed funds rate would have to get up to 6 and that it was certainly more likely than not that it would have to get to 5 50 whats very hard to know is whether that action in credit which is reinforcing the fed whether thats three moves worth of reinforcement whether its only one move worth of reinforcement and thats the judgment the feds going to have to make on an ongoing basis larry in your opinion how does money supply figure into your analysis of the economy overall there was a lot of talk this week by some economists actually saying that in fact the fall in the money supply during m2 as the united states really indicates that in fact were going to go if anything into a recession that were not going to hear about inflation anymore david i would describe myself as post monetarist i think when we started paying interest on reserves and so if a bank or somebody had an account at the fed it was kind of just like a interest bearing account and so money was no longer special by virtue of not paying interest when we had that change in our economy i think this whole concept of monetary aggregates as substantial predictors of whats going to happen lost a lot of its force and so id have to say that money stock is pretty far down on my list of indicators to follow