Summers spoke at the International Monetary Fund on Wednesday, warning against austerity measures amid a tepid economy. Yahoo Finance sat down with him to get little more color on the economy and to find out what keeps him up most at night. Read more
Harvard Magazine profiled a conversation with Summers on a variety of issues, including the recession, higher-ed and the economic environment. Summers said, “Harvard will have to choose between its commitment to preeminence and its commitment to doing things in traditional ways.” Read more
On April 7, 2016, Summers talked with John Hockenberry of PRI’s the Takeaway for a series on the the state of the global economy. The discussion included the sluggish economy, less energy driving investments, Sanders, Trump and the Broadway musical, Hamilton. Read more
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In March 31, 2016 interview with Jeremy Hobson of NPR’s Here and Now, Summers talked about the economy, the Fed and Donald Trump. Summers said, “I am more enthusiastic about the message of caution than the message of adjustment.” Read more
Summers appeared on BloombergGo! on February 18 and outlined steps that can be taken to help the U.S. avoid recession and improve the global economy. Summers said, “Its constructive for data-dependent Fed to delay hikes.” Read more
Click here to watch the full session.
https://media.chicagobooth.edu/Mediasite6/Play/40669d3081b845ffae32b1602214da701d
Summers published an article title, “The Age of Secular Stagnation: What It Is and What to Do About It,” in the February issue of Foreign Affairs. The article explores how expansionary fiscal policy by the U.S. government can help overcome secular stagnation problems and get growth back on track. Read more
Summers talks with Heather Boushey, of the Washington Center for Equitable Growth, about how inequality affects economic growth and stability. The discussion explores secular stagnation—what it is, what problems it creates, and the issues for policymaking—as well as how inequality plays a role in the phenomenon.
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Summers spoke on June 28, 2016 at The Economic Statecraft Speaker Series at the Center for Strategic Studies. The forum highlights the strategic role of economics in foreign policy and explores the making of international economic policy. Read more
Summers writes a review of Robert Gordon’s The Rise and Fall of American Growth: The US standard of living since the Civil War in the February issue of Prospect Magazine. Read more
Summers said the economy faces 1 in 3 chance of recession in a January 27, 2016 interview with Jeremy Hobson for NPR’s Here and Now. Read more
Summers spoke at the Council on Foreign Relations Outlook 2016: Assessing Global Economic and Political Risks on January 26, 2016 with Richard Haass. Read more
Jeffrey Gundlach and Larry Summers are joining derivatives traders in saying the Federal Reserve is too ambitious in its plans to raise interest rates against a backdrop of slowing global economic growth.
Gundlach, the co-founder of DoubleLine Capital LP, said moves by the central bank to raise rates are fighting non-existent inflation and hurting gross domestic product growth. Summers, the former Treasury secretary, said the economy can’t withstand the four rate increases that policy makers project this year.
Turbulence in global financial markets emanating from China has fueled concern of a global slowdown as oil prices dropped to a 12-year low. That has traders and investors questioning the Fed’s stance that domestic inflation will rebound gradually as U.S. wages pick up. Derivatives traders are pricing in fewer than two quarter-point rate increases in 2016.
“I’d be surprised if the world economy can comfortably withstand four hikes,” Summers said Wednesday in an interview with Bloomberg TV. “Markets agree with me and that’s why, despite the statements that are being made, markets aren’t expecting four hikes.”
The benchmark 10-year note yield fell one basis point, or 0.01 percentage point, to 2.09 percent as of 5 p.m. New York time, according to Bloomberg Bond Trader data, after touching the lowest since October. The 2.25 percent security due in November 2025 rose 3/32, or $0.94 per $1,000 face amount, to 101 12/32.
The extra yield that 10-year securities offer over two-year notes was at 118 basis points after touching the least since 2008. Longer-term yields tend to be more sensitive to the outlook for inflation, while short-term rates are more influenced by central-bank policy.
Traders are pricing in about a 36 percent chance the Fed will raise interest rates at or before its March meeting, down from 51 percent at the end of last year. The probability is based on the assumption that the effective Fed funds rate will trade at the middle of the new Federal Open Market Committee target range after the next increase.
“We could be looking at a really ugly situation during the first quarter of 2016,” Gundlach said during a market outlook webcast Tuesday. “It’s particularly more likely to happen if the Fed keeps banging this drum of raising interest rates against falling inflation.”
Gundlach’s $52.3 billion DoubleLine Total Return Bond Fund beat 94 percent of its peers during the past year, according to data compiled by Bloomberg. He correctly bet last year that interest rates would go sideways, oil would fall and China’s economic prospects were weakening.
Before the Fed raised rates last month, both Gundlach and Summers said any increase may be followed by a cut as a policy mistake would curtail long-term growth and inflation prospects. Summers warned that the Fed risked making an error that will be difficult to correct.
Treasuries returned about 1 percent this month, versus 0.9 percent for all of 2015, based on Bloomberg bond indexes.
Policy makers this week have offered conflicting views about the central bank’s rate path amid tumbling oil prices and global market volatility. Boston Fed President Eric Rosengren said Wednesday that estimates for U.S. economic growth are falling, putting the central bank’s projected path for rate increases at risk.
By contrast, Richmond Fed President Jeffery Lacker said Tuesday that the U.S. and China’s economies are linked “less than you would think” and the Fed is likely to need at least four rate rises this year.
Dallas Fed President Robert Kaplan said he “would have a bias to want to move toward normalization” in an interview with Bloomberg TV on Wednesday. “It comes with some risk,” he said. “Every time we increase the federal funds rate, we’re going to have to watch and see what the impact is.”
Policy makers need to heed the message from global commodity and stock markets that “risks are substantially tilted to the downside,” said Summers on Bloomberg GO on January 13, 2016. Read more
Summers decried a “creeping totalitarianism” on college campuses, calling out what he said is the growing preference for emotional comfort over academic inquiry in an interview with William Kristol. Read more
The International Economy founder and editor David Smick recently sat down with the former Treasury Secretary and Obama economic advisor to discuss the state of the world economy. Click here to read the full article.
Summers spoke at event on long-termism at a Center for American Progress event on October 21, 2015.
In an op-ed with Greg Mankiw in the New York Times on Sunday, October 25, 2015 Summers wrote, “Congress should side with President Obama and resist calls to scrap it [the excise tax on high-cost health care plans, the co-called Cadillac tax].” Read the full article here.
