Fed’s newfound hawkishness will start a recession? Summers thinks it will
There is a longer-term question that matters, too: Once inflation is finally brought under control, do we return to the post-2009 secular stagnation, or will there be a new paradigm?
He sees the threat of recession, even with 10-year bond yields at just over 3%, as strong evidence that he is right that the U.S. and the world can’t cope with higher rates.
“The fact that such low rates seem to be causing a recession is quite prohibitive,”
I differ I think secular stagnation is less likely, and I think Western governments will be more willing to spend than in the aftermath of the 2008-2009 recession.
James Mackintosh WSJ 27 June 2022
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