- Larry Summers sees a higher chance of a soft landing than he did 6 months ago, saying that although soft landings where the triumph of hope over experience, “occasionally hope does triumph over experience.”
- However, Summers says risks still remain, including the risk of a hard landing and the risk of a “no landing” in which inflation reaccelerates without a recession.
- Summers noted that he believes the market is underestimating the risk of inflation given that financial conditions have eased, and cited risks to inflation such as the 5.2% wage increase, tight labor conditions and historically elevated strike activity.
- Summers noted that “the post Cold War holiday is over,” and espresso concern that governments will need to invest more in defense, exacerbating budget deficits.
