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Former Obama Adviser Says Recession Likely Because White House, Federal Reserve Moved Too Slowly In Addressing Inflation

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A top Democratic economist fears that the United States has produced an inflationary environment that will require a recession to escape.

Larry Summers — who worked as Treasury Secretary under the Clinton administration and National Economic Council director under the Obama administration — said during an interview with Bloomberg that the Federal Reserve’s recent monetary policy taper came far too late.


“If I thought we could sustainably run the economy in a red-hot way, that would be a wonderful thing, but the consequence — and this is the excruciating lesson we learned in the 1970s — of an overheating economy is not merely elevated inflation, but constantly rising inflation,” Summers said. “That’s why my fear is that we are already reaching a point where it will be challenging to reduce inflation without giving rise to recession.”

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