In an interview with Friday’s edition of Bloomberg’s “Wall Street Week,” the economist, Harvard professor, director of the National Economic Council under President Barack Obama and Treasury Secretary under President Bill Clinton , Larry Summers, said stagflation is “the overriding probability as to where we’re going to get” over the next two years.
Summers said: “I think that’s the most likely place we’ll be. If stagflation means rising unemployment and still high inflation, I think that’s the overriding probability as to what we’re going to do in the last two years – in the next two years. As I said before… the painful fact that needs to illuminate our view is that we have never had a time when unemployment was below 4%, inflation was above 4% and we avoided the recession for the next two years – the next two years. And right now unemployment is well below 4% and inflation is well above 4%. A lot of people say, look, the job market is so strong, why would anyone think we’re going to have a recession? What the data shows is that the lower unemployment is, the more likely it is to fall in the coming months. »
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