Former Treasury Secretary Larry Summers warns of tough economic times to come.
Summers is painting a grim picture, saying the U.S. economy could slide into a recession in 2022. The former Treasury Secretary explained in a Bloomberg Economics podcast the Federal Reserve has been late to spot the risks of inflation. He believes if the U.S. central bank acts now, it risks tipping the economy into a slump. However, not everyone believes the U.S. is headed towards a downturn.
“If you look at what’s happened since COVID, basically in the months where we’ve had a big surge in cases, there’s been a bit slower growth. In the months where we haven’t had surges in cases, there’s been faster growth, but the growth has continued, and I think the momentum’s there to carry us through next year,” Ray Perryman, economist and President of the Perryman Group, said.
He doesn’t believe inflation will spin out of control.
“The big piece of the inflation right now that’s being cause by supply chain disruptions, the sudden push of money into the economy from the stimulus package, that will work itself out over the next few months,” Perryman explained. “I think by the second half of next year, you’ll be seeing that inflation being tamed quite a bit.”
He adds that Texas will fare better than many other states in 2022. That's thanks to our energy, technology, and bio-medical industries.