Former Treasury Secretary Lawrence Summers said Monday that the odds of a recession are “close to 50/50.”
“I told @kasie @CNN [CNN correspondent Kasie Hunt] today, I think there is a real possibility of a recession,” Summers wrote in a thread on the social platform X.
“I would have said a couple of months ago a recession was really unlikely this year. Now, it’s probably not 50/50, but getting close to 50/50. There is one central reason. Economic policies that are completely counterproductive,” he added.
The stock market on Monday started the week with intense losses amid rising American anxieties about the economy, with the Dow Jones Industrial Average closing with a loss of 890 points, or 2.1 percent.
Stocks have dropped steadily since the beginning of the month due to underwhelming economic data and topsy-turvy Trump administration tariff announcements.
On Monday, National Economic Council Director Kevin Hassett said he would “just be very wary … of conversations about recession, given that we had two negative quarters — that used to be a recession under Biden, and then that wasn’t a recession.”
“I think that what’s going to happen is the first quarter is going to squeak into the positive category, and then the second quarter is going to take off as everybody sees the reality of the tax cuts,” Hassett told CNBC’s Joe Kernen in an interview.
Beginning Monday, Ontario’s government is also putting a 25 percent surcharge on electricity exports to three states in the U.S. in response to Trump’s tariffs aimed at Canada.
“All the emphasis on tariffs and all the ambiguity and uncertainty has both chilled demand and caused prices to go up,’ Summers said in his Monday X thread. “We are getting the worst of both worlds – concerns about inflation and an economic downturn and more uncertainty about the future and that slows everything down.”
The Hill has reached out to the White House for comment.