Former U.S. Treasury Secretary Summers points out that there is an increased risk that the recession that he predicted will begin earlier, saying inflation might slow if the recession becomes a reality. I showed my point of view.
“The risk of going into recession in 2022 is much higher than when I was judging 6-9 weeks ago,” Summers said in a Bloomberg television show. “For the next 6-9 months.” If we go into recession, we will see a drop in inflationary pressure. “
Statistics released this week show that consumers are refraining from spending in the United States due to the accelerating inflation over the past year. Economists are also lowering their economic growth outlook. Some say that the US’s gross domestic product (GDP) for April-June (second quarter) will continue to be negative from the previous quarter.
Mr Summers said the situation is now more likely to be a downturn scenario brought regarding by a “self-fulfilling process of accelerating inflation and declining income.”
He said US monetary policymakers would be required to weaken the tightening if the US actually entered a recession. “The authorities will recognize the need to slow down the pace of rate hikes,” he said, compared to strong growth and upward pressure on wages.
Original title:Summers Says Risk of 2022 Recession Climbing; May Damp Inflation
