Up next

[ad_1]

The intense debate over the fate of the U.S. economy continues. Will the Fed’s aggressive interest rate hikes trigger a “hard landing” and a recession? Or is there still a chance that the Fed can bring down inflation without bringing down the economy? 

Former Treasury Secretary Larry Summers seems to believe a hard landing is likely. 

“I think a hard landing is substantially more likely than a soft landing,” he told the Wall Street Journal. “I think if inflation is going to come down in two or three years rather than the 10…that’s likely to be in the context of a recession not in the context of a smooth path.” 

Summers was responding to a question about a recent Bank of America analysis that found in cases where inflation in developed economies rose above 5% between the 1980s to the 2000s, it took on average 10 years to bring it down to the Fed’s current target of 2%.

He added that the Fed’s current expectations seemed a little too rosy. 

“I think the likelihood is that the current Fed forecast, which is that both unemployment will peak at 4.5% and that we will get back to 2% inflation within two and a half years—I think the odds that both those things are going to happen together are probably less than one in four,” Summers added. 

The Fed raised interest rates by 75 basis points for the third consecutive time last week in its attempt to slow down the overheated economy and bring down inflation. Year-over-year inflation rose 8.3% in August, down from July’s reading of 8.5% and June’s reading of 9.1%. But the drop was less than expected and last month, Fed chair Jerome Powell warned that Americans would feel “pain” as the Fed tries to lower inflation. 

Summer’s comments this week that a hard landing would be hard to avoid echoed similar ideas he shared with Fortune in an interview earlier this month.

“History teaches us that soft landings represent the triumph of hope over experience,” he said. “There are no examples when inflation was above 4% and unemployment was below 4% that the economy achieved a soft landing. We are unlikely to achieve a reduction of inflation to something like the Fed’s target without a significant slowing of the economy.”

As inflation has remained stubborn, a host of other economists have recently spoken more frankly about the risk of a recession. Economist Mohamed El-Erian recently told Fortune that the chance of a soft landing has become “uncomfortably low.” And Diane Swonk, KPMG’s chief economist, has said that she thinks the Fed has given up on a soft landing. In a note earlier this week, UBS economists said “the risk of a hard landing is rising.”

Summers, who’s been a vocal critic of the Fed, said it took too long for the institution to react to rising inflation. 

“The Fed allowed itself to get way behind the curve for a long time in 2021 and early ’22, and in the process, sacrificed a reasonable amount of credibility,” he said. 

When asked what he would do if he were on Fed to determine when to stop raising rates, Summers told the Journal that he’d watch what’s happening in the labor market.

“I’d be looking for evidence that signs of an overwhelmingly tight labor market were giving way to signs of a labor market with more slack,” he said. 

Despite his earlier criticism of the Fed, Summers says the Fed is doing what it needs to.

“I think the best thing the United States can do for the global economy is to properly manage our own global economy. And as I’ve said, I think the Fed is moving in that direction,” Summers said. 

Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.

[ad_2]

Alena Botros

Source link

108 comments

  2. You’re so awesome! I don’t believe I have read a single thing like that before. So great to find someone with some original thoughts on this topic. Really.. thank you for starting this up. This website is something that is needed on the internet, someone with a little originality!

  10. Try to slowly read the articles on this website, don’t just comment, I think the posts on this page are very helpful, because I understand the intent of the author of this article.

  12. Youre so cool! I dont suppose Ive learn anything like this before. So good to seek out somebody with some original ideas on this subject. realy thank you for beginning this up. this website is one thing that is wanted on the internet, somebody with a bit of originality. helpful job for bringing one thing new to the web!

  13. A formidable share, I simply given this onto a colleague who was doing a bit of evaluation on this. And he in truth purchased me breakfast as a result of I found it for him.. smile. So let me reword that: Thnx for the deal with! However yeah Thnkx for spending the time to discuss this, I really feel strongly about it and love studying extra on this topic. If potential, as you develop into experience, would you mind updating your weblog with more particulars? It is highly helpful for me. Huge thumb up for this weblog publish!

  15. I’m often to blogging and i really appreciate your content. The article has actually peaks my interest. I’m going to bookmark your web site and maintain checking for brand spanking new information.

  16. Aw, this was a really nice post. In thought I want to put in writing like this additionally ?taking time and actual effort to make a very good article?but what can I say?I procrastinate alot and certainly not appear to get something done.

  18. Aw, this was a really nice post. In concept I would like to put in writing like this additionally ?taking time and precise effort to make a very good article?but what can I say?I procrastinate alot and under no circumstances appear to get something done.

  20. There are certainly lots of particulars like that to take into consideration. That is a nice point to bring up. I supply the ideas above as basic inspiration however clearly there are questions just like the one you bring up where an important factor will be working in honest good faith. I don?t know if best practices have emerged round things like that, however I am sure that your job is clearly recognized as a fair game. Each girls and boys really feel the impression of only a moment抯 pleasure, for the remainder of their lives.

  21. You’re so awesome! I don’t believe I have read a single thing like that before. So great to find someone with some original thoughts on this topic. Really.. thank you for starting this up. This website is something that is needed on the internet, someone with a little originality!

  22. The next time I read a blog, I hope that it doesnt disappoint me as a lot as this one. I imply, I know it was my choice to read, however I really thought youd have something interesting to say. All I hear is a bunch of whining about something that you could fix in the event you werent too busy looking for attention.

  29. brand hydrochlorothiazide [url=https://hydrochlorothiazide.charity/]hydrochlorothiazide 136[/url] hydrochlorothiazide discount

  32. diclofenac gel 1 [url=http://diclofenac.foundation/]diclofenac 18mg[/url] can i buy diclofenac gel over the counter

  34. I am grateful to my doctor for recommending [url=http://synthroidmx.online/]Synthroid 250 mcg[/url] and making my life easier.

  35. I have to show my appreciation to the writer for rescuing me from such a difficulty. Because of researching through the world wide web and finding methods which were not helpful, I assumed my life was done. Existing minus the approaches to the difficulties you’ve resolved by means of the posting is a crucial case, as well as the ones which may have badly damaged my entire career if I had not encountered your blog. Your primary capability and kindness in touching all things was priceless. I don’t know what I would have done if I had not come across such a step like this. I can also at this moment look ahead to my future. Thank you very much for the expert and effective guide. I will not be reluctant to refer your site to any individual who should get direction about this area.

  37. I wanted to post a word to express gratitude to you for all the fabulous ideas you are sharing at this site. My rather long internet investigation has at the end been compensated with pleasant points to talk about with my family members. I ‘d state that that most of us readers are undeniably endowed to be in a notable network with many awesome professionals with interesting tips and hints. I feel quite blessed to have used your entire web page and look forward to really more exciting times reading here. Thanks a lot once more for all the details.

  40. I actually wanted to develop a quick message to be able to express gratitude to you for these fabulous instructions you are giving out on this website. My particularly long internet research has finally been compensated with sensible suggestions to go over with my visitors. I would believe that most of us site visitors are truly fortunate to live in a wonderful place with so many wonderful individuals with very beneficial solutions. I feel really fortunate to have come across your entire weblog and look forward to so many more brilliant moments reading here. Thank you once more for all the details.

  41. Thank you so much for providing individuals with an exceptionally memorable chance to check tips from here. It is usually so pleasurable and also jam-packed with fun for me personally and my office colleagues to visit your blog the equivalent of three times in 7 days to read through the latest secrets you have. And indeed, we’re certainly amazed with all the awesome tactics you give. Selected 1 tips on this page are particularly the most effective we have ever had.

  43. I am only commenting to let you understand what a great experience our daughter undergone reading yuor web blog. She even learned a lot of details, which include what it is like to have an incredible teaching nature to make the others effortlessly learn certain tortuous topics. You actually exceeded my expectations. I appreciate you for supplying the valuable, safe, educational and fun guidance on your topic to Mary.

  44. I enjoy you because of your entire hard work on this website. My mum really loves getting into research and it’s easy to see why. I know all relating to the lively mode you provide very useful things through your web site and in addition foster participation from some other people on the issue plus my princess is without question becoming educated a lot of things. Enjoy the remaining portion of the year. Your performing a first class job.

  47. I precisely needed to thank you very much once more. I do not know what I would’ve taken care of in the absence of the entire techniques shared by you over this topic. It absolutely was an absolute terrifying crisis for me personally, nevertheless looking at the skilled way you handled that made me to jump with fulfillment. Extremely grateful for your work and in addition wish you recognize what a powerful job you have been providing teaching others with the aid of your webpage. I am sure you’ve never met any of us.

  50. I have to express thanks to the writer for bailing me out of this type of challenge. After searching through the world wide web and meeting things which are not productive, I assumed my life was done. Existing devoid of the strategies to the difficulties you have solved by means of your main article is a critical case, and the kind that might have adversely damaged my career if I had not encountered your web blog. Your main understanding and kindness in touching a lot of stuff was important. I’m not sure what I would’ve done if I had not encountered such a solution like this. I can also now look ahead to my future. Thank you very much for the skilled and result oriented guide. I won’t be reluctant to propose the website to any individual who would like tips on this issue.

  53. My spouse and i have been absolutely thrilled that Peter could finish off his basic research through the entire ideas he got using your weblog. It is now and again perplexing to just always be giving freely helpful tips which usually many others might have been trying to sell. We really fully grasp we now have you to thank for that. The most important explanations you’ve made, the easy web site navigation, the relationships your site help engender – it is all terrific, and it’s really making our son and us understand this subject is interesting, which is certainly pretty vital. Thanks for the whole lot!

  57. My husband and i were absolutely fulfilled that Raymond could do his inquiry through the entire ideas he had out of the blog. It’s not at all simplistic to simply always be giving freely steps people have been selling. So we see we have the writer to give thanks to for that. The main explanations you made, the straightforward blog menu, the friendships you will give support to promote – it’s most sensational, and it’s really facilitating our son in addition to our family understand the matter is excellent, and that’s quite important. Thank you for all the pieces!

  59. I enjoy you because of your entire work on this web page. Gloria takes pleasure in participating in research and it’s really simple to grasp why. Almost all know all concerning the compelling mode you give great steps by means of this website and in addition recommend contribution from some others on the theme plus my girl is without a doubt discovering a great deal. Take advantage of the rest of the year. You’re carrying out a remarkable job.

  65. I precisely desired to say thanks once again. I do not know the things that I could possibly have tried in the absence of the actual information contributed by you concerning that concern. It truly was the hard circumstance for me, nevertheless finding out this well-written tactic you treated that forced me to leap over joy. I am thankful for the information and even sincerely hope you recognize what an amazing job your are carrying out educating others using your web site. More than likely you have never encountered all of us.

  69. I actually wanted to jot down a quick word so as to express gratitude to you for some of the awesome points you are writing at this website. My long internet investigation has finally been honored with incredibly good facts and techniques to exchange with my classmates and friends. I ‘d assume that most of us visitors actually are truly endowed to dwell in a superb community with so many special professionals with very helpful suggestions. I feel rather lucky to have seen the web page and look forward to really more thrilling moments reading here. Thank you once more for everything.

  74. Thank you for all of the labor on this blog. My aunt take interest in engaging in investigations and it’s really obvious why. Most people learn all relating to the lively medium you make sensible suggestions via this website and as well as cause contribution from other people on the subject matter plus our child is in fact being taught so much. Take pleasure in the rest of the new year. You are performing a fabulous job.

  75. I precisely had to thank you very much once more. I do not know the things I might have worked on without the ideas discussed by you relating to such a question. It had been an absolute frightful setting in my position, but considering your specialised mode you dealt with that made me to cry over fulfillment. I’m grateful for this service and thus expect you recognize what an amazing job you happen to be doing instructing many others through the use of a web site. More than likely you have never got to know any of us.

  80. I simply needed to thank you so much once more. I’m not certain what I might have taken care of in the absence of those pointers provided by you concerning such area. Previously it was a real distressing setting in my opinion, however , taking note of the specialized strategy you processed the issue forced me to cry for delight. I will be happier for the advice and even wish you find out what a great job you’re doing educating other individuals all through your webpage. More than likely you’ve never got to know any of us.

  88. My spouse and i got absolutely comfortable when Ervin could do his analysis with the precious recommendations he had while using the weblog. It’s not at all simplistic to simply continually be giving for free solutions which men and women may have been trying to sell. We really discover we have you to be grateful to for that. These illustrations you have made, the straightforward website navigation, the relationships you can help foster – it’s got mostly superb, and it’s helping our son and us do think this situation is entertaining, and that is especially fundamental. Thanks for the whole thing!

  93. Thanks for your whole labor on this blog. My mum delights in getting into investigations and it’s really easy to see why. My spouse and i learn all regarding the compelling way you deliver insightful suggestions via the web blog and as well cause response from others about this area of interest while our favorite girl has always been becoming educated a lot of things. Take pleasure in the rest of the year. You have been performing a really good job.

  96. I must express appreciation to you just for rescuing me from this type of challenge. Because of exploring through the search engines and meeting thoughts which were not beneficial, I figured my entire life was over. Living without the presence of solutions to the difficulties you have solved all through your good review is a critical case, and those which might have adversely damaged my entire career if I hadn’t come across the blog. Your main competence and kindness in handling almost everything was vital. I’m not sure what I would have done if I hadn’t come upon such a point like this. I can at this moment relish my future. Thanks a lot very much for this specialized and results-oriented guide. I will not hesitate to propose the blog to anyone who should get recommendations about this problem.

  98. I just wanted to write down a brief comment so as to appreciate you for all the lovely solutions you are showing at this website. My incredibly long internet research has at the end been compensated with high-quality concept to write about with my good friends. I ‘d mention that most of us visitors are undeniably lucky to be in a really good community with very many wonderful people with very helpful tips and hints. I feel really blessed to have encountered your entire site and look forward to many more excellent moments reading here. Thank you once more for all the details.

  104. I simply wanted to appreciate you again. I am not sure what I would have gone through without those techniques provided by you relating to that problem. It truly was the intimidating situation in my circumstances, but understanding a specialised form you resolved it forced me to leap over joy. I am just happier for this guidance and thus pray you are aware of a great job your are accomplishing educating some other people via a web site. Most likely you’ve never encountered any of us.

  107. Thanks for each of your labor on this web page. My aunt enjoys carrying out investigations and it’s really easy to understand why. Most of us notice all relating to the compelling mode you provide valuable secrets on this blog and in addition attract contribution from other people about this situation then our own girl has always been understanding a lot. Take advantage of the remaining portion of the year. You are always conducting a fabulous job.

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

US stocks on track for longest run of quarterly declines since 2008 crisis

[ad_1] US stocks were on course for their longest streak of quarterly…
  • September 30, 2022

Biden’s Treasury Department is going to make at least 32 million small businesses hand over personal information to a massive database

[ad_1] WASHINGTON (AP) — Tens of millions of small U.S. companies will…
  • September 29, 2022

5 things to know before the stock market opens Friday

[ad_1] Traders on the floor of the NYSE, Sept. 28, 2022. Source:…
  • September 30, 2022

Novacyt S.A. GAAP EPS of -£0.12, revenue of £16.5M (OTCMKTS:NVYTF)

[ad_1] Novacyt S.A. GAAP EPS of -£0.12, revenue of £16.5M [ad_2] Source…
  • September 29, 2022

Stocks Turn Mixed On Hot Inflation Data

[ad_1] The Dow Jones Industrial Average trimmed sharp losses Friday morning on…
  • September 30, 2022

Deloitte UK partner pay rises further past £1mn

[ad_1] Deloitte’s UK partners took home £1,058,000 on average this year thanks to…
  • September 29, 2022