{"id":761,"date":"2023-02-14T10:48:12","date_gmt":"2023-02-14T15:48:12","guid":{"rendered":"https:\/\/embarrdowns.com\/larry-summers-warns-of-risks-of-sudden-us-economic-downturn-high-inflation\/"},"modified":"2023-02-14T10:48:12","modified_gmt":"2023-02-14T15:48:12","slug":"larry-summers-warns-of-risks-of-sudden-us-economic-downturn-high-inflation","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/larry-summers-warns-of-risks-of-sudden-us-economic-downturn-high-inflation\/","title":{"rendered":"Larry Summers Warns of Risks of Sudden US Economic Downturn, High Inflation"},"content":{"rendered":"

Former Treasury Secretary Larry Summers warned of the risks of a sudden downturn in the US economy and cautioned that inflation indicators remain \u201cunimaginably high\u201d from two or three years ago, making getting the rest of the way back to the Federal Reserve\u2019s 2% target \u201cquite difficult.\u201d[0]<\/a><\/sup><\/p>\n

\u201cThe hard thing to judge is whether inflation is on a strong enough downward trajectory to get to the 2% target, and whether, if inflation comes down, it will stay down,\u201d he said in a Friday interview with Bloomberg.<\/p>\n

The Fed has now raised rates by 450 basis points in an attempt to bring inflation back to its target, but Summers warned that the economy could face a \u201cWile E. Coyote moment\u201d if consumers spend down their pandemic savings, businesses cut costs, and \u201cgeopolitical uncertainty\u201d rises.<\/p>\n

He compared inflation to a half-way healed \u201cinfection\u201d that could return, in a harder fight for the Fed if not properly treated.[1]<\/a><\/sup><\/p>\n

\u201cI\u2019m not sure we\u2019re on a trajectory that\u2019s going to get us to 2% inflation without more interest-rate increases than the market is now anticipating,\u201d he said.[2]<\/a><\/sup><\/p>\n

Even though there have been a lot of job losses reported from big tech, media and financial businesses in the past few weeks, the US job market remains strong despite the 8 interest rate increases in 11 months that were meant to slow down the economy.[3]<\/a><\/sup><\/p>\n

Fed Chair Jerome Powell said last week that the latest data is indicative of \u201cdisinflation\u201d in some key segments of the economy.[4]<\/a><\/sup> But Summers said that getting inflation all the way back to the 2% target remains a challenge.<\/p>\n

\u201cIt\u2019s easier to move the ball down the field at midfield than it is when you\u2019re in the red zone,\u201d he said.[5]<\/a><\/sup> \u201cAnd we\u2019re getting closer to the red zone with respect to inflation.[6]<\/a><\/sup><\/p>\n

0. <\/span>“Summers Sees Risk of ‘Sudden Stop’ in Economy After Jobs Surge” Bloomberg, 3 Feb. 2023, https:\/\/www.bloomberg.com\/news\/articles\/2023-02-03\/summers-sees-risk-of-sudden-stop-in-economy-after-jobs-surge<\/a><\/a><\/p>\n

1. <\/span>“Former Treasury Secretary Larry Summers compares falling inflation to a half-way healed ‘infection’ that could” Business Insider India, 9 Feb. 2023, https:\/\/www.businessinsider.in\/stock-market\/news\/former-treasury-secretary-larry-summers-compares-falling-inflation-to-a-half-way-healed-infection-that-could-worsen-if-not-treated-properly\/articleshow\/97779896.cms<\/a><\/a><\/p>\n

2. <\/span>“Economist Larry Summers compares the Fed\u2019s inflation fight to taking a medicine for an \u2018infection\u2019\u2014and says the \u2018risks are very large\u2019 that the economy tips into a recession” Fortune, 9 Feb. 2023, https:\/\/fortune.com\/2023\/02\/09\/larry-summers-compares-inflation-to-infection-big-risks-recession<\/a><\/a><\/p>\n

3. <\/span>“Weekly jobless claims edged up last week, but the labor market remains robust” ABC17News.com, 5 Feb. 2023, https:\/\/abc17news.com\/money\/cnn-business-consumer\/2023\/02\/05\/larry-summers-more-likely-the-fed-can-pull-off-a-soft-landing-but-dont-get-hopes-up-2<\/a><\/a><\/p>\n

4. <\/span>“Larry Summers says the economy could be headed towards a \u2018Wile E. Coyote moment\u2019” Fortune, 9 Feb. 2023, https:\/\/fortune.com\/2023\/02\/09\/larry-summers-economic-outlook-coulwiley-coyote-momeny-layoffs-recession-inflation\/<\/a><\/a><\/p>\n

5. <\/span>“Larry Summers warns now is not the time for investor \u2018euphoria\u2019\u2014markets are headed for a \u2018turbulent period\u2019” Yahoo! Voices, 13 Feb. 2023, https:\/\/www.yahoo.com\/now\/larry-summers-warns-now-not-211809137.html<\/a><\/a><\/p>\n

6. <\/span>“Ahead of Tuesday’s CPI Data, Larry Summers Warns Further Inflation Reduction Will Be Harder: ‘We’re Getti” Benzinga, 11 Feb. 2023, https:\/\/www.benzinga.com\/news\/23\/02\/30867933\/ahead-of-tuesdays-cpi-data-larry-summers-warns-further-inflation-reduction-will-be-harder-were-getti<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Former Treasury Secretary Larry Summers warned of the risks of a sudden downturn in the US economy and cautioned that inflation indicators remain \u201cunimaginably high\u201d from two or three years ago, making getting the rest of the way back to the Federal Reserve\u2019s 2% target \u201cquite difficult.\u201d[0]<\/a><\/sup><\/p>\n

\u201cThe hard thing to judge is whether inflation is on a strong enough downward trajectory to get to the 2% target, and whether, if inflation comes down, it will stay down,\u201d he said in a Friday interview with Bloomberg.<\/p>\n

The Fed has now raised rates by 450 basis points in an attempt to bring inflation back to its target, but Summers warned that the economy could face a \u201cWile E. Coyote moment\u201d if consumers spend down their pandemic savings, businesses cut costs, and \u201cgeopolitical uncertainty\u201d rises.<\/p>\n

He compared inflation to a half-way healed \u201cinfection\u201d that could return, in a harder fight for the Fed if not properly treated.[1]<\/a><\/sup><\/p>\n

\u201cI\u2019m not sure we\u2019re on a trajectory that\u2019s going to get us to 2% inflation without more interest-rate increases than the market is now anticipating,\u201d he said.[2]<\/a><\/sup><\/p>\n

Even though there have been a lot of job losses reported from big tech, media and financial businesses in the past few weeks, the US job market remains strong despite the 8 interest rate increases in 11 months that were meant to slow down the economy.[3]<\/a><\/sup><\/p>\n

Fed Chair Jerome Powell said last week that the latest data is indicative of \u201cdisinflation\u201d in some key segments of the economy.[4]<\/a><\/sup> But Summers said that getting inflation all the way back to the 2% target remains a challenge.<\/p>\n

\u201cIt\u2019s easier to move the ball down the field at midfield than it is when you\u2019re in the red zone,\u201d he said.[5]<\/a><\/sup> \u201cAnd we\u2019re getting closer to the red zone with respect to inflation.[6]<\/a><\/sup><\/p>\n

0. <\/span>“Summers Sees Risk of ‘Sudden Stop’ in Economy After Jobs Surge” Bloomberg, 3 Feb. 2023, https:\/\/www.bloomberg.com\/news\/articles\/2023-02-03\/summers-sees-risk-of-sudden-stop-in-economy-after-jobs-surge<\/a><\/a><\/p>\n

1. <\/span>“Former Treasury Secretary Larry Summers compares falling inflation to a half-way healed ‘infection’ that could” Business Insider India, 9 Feb. 2023, https:\/\/www.businessinsider.in\/stock-market\/news\/former-treasury-secretary-larry-summers-compares-falling-inflation-to-a-half-way-healed-infection-that-could-worsen-if-not-treated-properly\/articleshow\/97779896.cms<\/a><\/a><\/p>\n

2. <\/span>“Economist Larry Summers compares the Fed\u2019s inflation fight to taking a medicine for an \u2018infection\u2019\u2014and says the \u2018risks are very large\u2019 that the economy tips into a recession” Fortune, 9 Feb. 2023, https:\/\/fortune.com\/2023\/02\/09\/larry-summers-compares-inflation-to-infection-big-risks-recession<\/a><\/a><\/p>\n

3. <\/span>“Weekly jobless claims edged up last week, but the labor market remains robust” ABC17News.com, 5 Feb. 2023, https:\/\/abc17news.com\/money\/cnn-business-consumer\/2023\/02\/05\/larry-summers-more-likely-the-fed-can-pull-off-a-soft-landing-but-dont-get-hopes-up-2<\/a><\/a><\/p>\n

4. <\/span>“Larry Summers says the economy could be headed towards a \u2018Wile E. Coyote moment\u2019” Fortune, 9 Feb. 2023, https:\/\/fortune.com\/2023\/02\/09\/larry-summers-economic-outlook-coulwiley-coyote-momeny-layoffs-recession-inflation\/<\/a><\/a><\/p>\n

5. <\/span>“Larry Summers warns now is not the time for investor \u2018euphoria\u2019\u2014markets are headed for a \u2018turbulent period\u2019” Yahoo! Voices, 13 Feb. 2023, https:\/\/www.yahoo.com\/now\/larry-summers-warns-now-not-211809137.html<\/a><\/a><\/p>\n

6. <\/span>“Ahead of Tuesday’s CPI Data, Larry Summers Warns Further Inflation Reduction Will Be Harder: ‘We’re Getti” Benzinga, 11 Feb. 2023, https:\/\/www.benzinga.com\/news\/23\/02\/30867933\/ahead-of-tuesdays-cpi-data-larry-summers-warns-further-inflation-reduction-will-be-harder-were-getti<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":760,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"_links":{"self":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/761"}],"collection":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/comments?post=761"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/761\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media\/760"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=761"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=761"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=761"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}