Former Treasury Secretary Lawrence Summers said the likelihood of a US recession is rising after a series of weak economic indicators and that the Federal Reserve is approaching the end of its series of interest-rate hikes.
“What’s pretty clear is that we’re in the very late innings of the current tightening cycle,” Summers said on Bloomberg Television’s “Wall Street Week” with David Westin.
“Whether there’s going to be another move necessary or not, I think that’s a judgment they should be holding off on until the very last kind of moment,” he said of Fed policymakers, whose next decision comes May 3.
Summers discounted Friday’s March jobs report, which he said reflected the strength of the economy early in the first quarter but is now less relevant given prospects of a tightening in credit. The data showed another firm gain for US payrolls, with the unemployment rate dipping to 3.5%.