Former Treasury Secretary Warns of Recession and 2 Million Job Losses
Former Treasury Secretary Lawrence Summers has warned that the United States is likely heading into a recession, partly due to President Donald Trump’s escalating tariff policies.
In a recent appearance on Bloomberg Television’s Wall Street Week, Summers stated that these tariffs could result in the loss of 2 million jobs and a significant decline in household incomes.
Tariffs Could Echo the Impact of the Great Depression
Summers expressed concern that the current tariff increases are more detrimental than those seen in 1930, which contributed to the Great Depression. He emphasized that these tariff measures could lead to a recession where families could lose up to $5,000 in income. Summers also urged policymakers to reconsider the aggressive tariff policies, suggesting they risk exacerbating the financial instability.
Impact on Financial Markets and Global Economy
According to Summers, financial markets are reacting strongly to news of the tariffs, with stocks surging on reports of relief and dropping on news of continued levies. He also warned that a downturn in the U.S. economy would widen the budget deficit and cause financial distress, particularly for higher-risk companies and countries worldwide. He cautioned that the bottom for market prices might not yet be reached, signaling further volatility ahead.
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