Summers: Risk of Recession in 2022 Is ‘Significantly Higher’ Than It Was Six, Nine Weeks Ago

During an interview aired on Friday’s broadcast of Bloomberg’s “Wall Street Week,” Harvard Professor, economist, Director of the National Economic Council under President Barack Obama, and Treasury Secretary under President Bill Clinton Larry Summers stated that the risk of a recession this year “are significantly higher than I would have judged six or nine weeks ago.”

Summers said, “I think you have to say that whatever you thought about recession risks a month ago, the recession risks through the year 2022 have to have gone up in a quite material way. I felt for a long time, as you know, David, that we’re not going to have inflation return near target without a significant economic downturn. But that downturn could happen either because interest rates set by the Fed rise very, very sharply or it could happen because of a kind of self-fulfilling process coming out of the high inflation and reductions in people’s incomes. And the latter possibility is looking like — is looking more likely today than it was.”

He added, “I think the risks of a 2022 recession are significantly higher than I would have judged six or nine weeks ago.” And “I think you have to say that the chance that a recession [that’s] ultimately dated as having begun during 2022 has gone up significantly.”

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