Ahead of the release of second-quarter GDP figures and a key Federal Reserve decision this week, former Treasury Secretary Larry Summers said there was a high likelihood of a US recession.
The Fed isn't likely to be able to engineer a soft landing as it raises interest rates to deal with the strongest inflation in 41 years, according to the Fed's director of monetary policy.
When we've been in this type of situation before, I think there is a very high likelihood of a recession.
When inflation is high and the unemployment rate is low, the recession follows. Soft landings symbolize hope over experience. I don't think we'll see one.
He did not say when he expects a recession to occur. Ahead of the release of preliminary second-quarter gross domestic product figures, which could show the US has already entered a recession, his comments came.
The US economy contracted by 1.6% in the first quarter.
GDP is expected to have grown in the second quarter. Bank of America andDeutsche Bank are anticipating a contraction.
The US is in a recession if the GDP falls in two straight quarters. The National Bureau of Economic Research is the official arbiter of a recession in the United States. A decline in economic activity that is spread across the economy and lasts more than a few months is defined by it.
The government could be doing more to tackle price rises in order to take the burden off the Fed.
"I think we need strong action from our central bank." He said that the government needs to do other things.
The government should focus on increasing energy production in order to bring down the budget deficit, according to former President Barack Obama's advisor.
He said that if we continue with the kind of policies we had in 2021, there will be a lot of pain later. I'm afraid that we're not going to get through this without a recession, but that's not true.
The Fed is expected to raise interest rates by 75 basis points on Wednesday, the second hike in as many months.
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