Summers Says Recession Still Looms, Fed Getting Closer to Done

Former Treasury Secretary Lawrence Summers said that the US economy is still facing a recession this year, despite encouraging news in recent weeks.

“One has to be careful of false dawns,” Summers told Bloomberg Television’s “Wall Street Week” with David Westin. “I would stick with my view that a recession this year is more likely than not.”

Summers spoke a day after the latest US consumer-price index report showed a further slowdown in inflation to a 6.5% annual rate, the lowest since October 2021. He noted that evidence of “wage restraint” in the wake of a slowdown in earnings gains in December was “part of the good news” lately.

The Harvard University professor and paid contributor to Bloomberg Television has for some time predicted that a recession would be necessary to bring US inflation down toward the Federal Reserve’s 2% target.

The Fed’s job in raising interest rates to damp inflation is now approaching an end, Summers predicted.