"Former Treasury Secretary Larry Summers has warned there's a 70% chance the US economy will slip into recession. In an interview with Foreign Policy's Ravi Agrawal, the former Harvard University president discussed a range of topics, including the global economic outlook, the dollar's strength, and the West's handling of Russian sanctions.
"The chance that a recession will have begun this year in the US over the next 12 months is probably about 70 percent," Summers said, . . Traders are pricing in a 64% chance the Fed will raise rates by another 25 basis points at its May meeting, according to the CME FedWatch Tool. Higher interest rates encourage saving over spending, investing, and hiring, but make borrowing more expensive. That can deter consumption, increase unemployment, and cause an economic downturn.
Meanwhile, fears of a credit crunch are on the rise following the collapse of Silicon Valley Bank last month. Like Summers, veteran economist Nouriel Roubini has warned that a pullback in lending could trigger a recession, given it could crimp overall demand."
Read next
READ MORE
No comments:
Post a Comment