Recession more likely than not next year or second: Larry Summers

The U.S. economy will “more likely than not” experience a recession over the next two years, Larry Summers, who served as economic adviser to former President Barack Obama, warned on Sunday.

High inflation has fueled the economic worries of millions of Americans in recent months, and economists don’t expect the problem to dissipate any time soon. Some warn that economic conditions could even deteriorate in the coming years. During an appearance on CNN State of the UnionSummers, a Democrat who also served as President Bill Clinton’s Treasury secretary from 1999 to 2001, raised concerns about a possible coming recession.

Host Dana Bash pressed him on recent comments by current Treasury Secretary Janet Yellen, who has sought to allay fears another recession is looming, saying this week she thinks it remains unlikely .

Summers, disagreeing with Yellen, explained that the periods of high inflation and low unemployment, which the country is currently experiencing, are “almost always” followed by a recession within the next two years – and he thinks this time is not is no different.

There will be “more likely than not” a recession in the next two years, former Treasury Secretary Larry Summers predicted on Sunday. Summers, who has served in Democratic presidential administrations, disagreed with current Secretary Janet Yellen as Americans continue to grapple with inflation. Above, Summers is seen in a Fox News studio in May 2017.
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“I think there is definitely a risk of recession next year,” he said. “And I think given where we are, it’s more likely than not that we’ll have a recession in the next two years.”

He added, however, that he believed a future recession would be manageable if the Biden administration was well prepared to react quickly.

Her remarks contrast with Yellen, who said she doesn’t believe a recession is underway, at a New York Times Dealbook event Thursday. She admitted, however, that growth would “absolutely” slow and that gasoline prices, which average more than $5 a gallon nationwide, are not expected to drop anytime soon.

“I don’t think we’re going to have a recession,” she said, Reuters reported. “Consumer spending is very strong. Capital spending is strong. I know people are very upset and rightly so about inflation, but there’s no sign that a recession is underway.”

Summers has become one of the few Democratic critics of some of President Joe Biden’s economic policies. Last year, he criticized the American Rescue Plan, the Biden administration’s landmark bill that aimed to stimulate the economy amid the coronavirus pandemic.

He warned that the legislation would lead to inflation, calling it “the least responsible macroeconomic policy” the United States has adopted in the past four decades.

Last week, World Bank President David Malpass warned of a global recession amid the Russian-Ukrainian war, COVID-19 lockdowns in China, supply chain disruptions and the risk of stagnation.

“For many countries, recession will be difficult to avoid. Markets are looking ahead, so there is an urgent need to encourage production and avoid trade restrictions. indebtedness are needed to tackle capital misallocation and inequality,” he said. in a report.


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