Former treasury secretary Larry Summers issues dire warning: U.S. will "more likely than
Published: 10-10-2022 01:31
U.S. economy at risk of recession in next 18 months, warns Larry Summers
Former treasury secretary Larry Summers warned Thursday that the U.S. will "more likely than not" experience a recession in the next 18 months.
In an interview on CNBC's "Halftime Report," Summers said he believes there is a one-in-three chance of a recession in the next year and a half.
"I think the most likely case is that we're going to have a recession sometime in the next year or two," Summers said. "It's not 100 percent certain, but I would say it's more likely than not."
The U.S. economy has been expanding for more than eight years, making it one of the longest periods of growth on record. However, there are several factors that could lead to a downturn in the near future, including rising interest rates and trade tensions with China.
Summers said he believes the Federal Reserve should be "very cautious" about raising rates any further, as doing so could put the economy at risk of tipping into recession.
"I worry that if they continue to raise interest rates at a time when inflation is quiescent, they may well tip us into recession," he said.
The Fed raised rates three times in 2018 and is widely expected to do so again this year. However, if the economy weakens, the central bank could change course and cut rates in an effort to boost growth.
