[Summary] Yellen Says "No Signs of Recession" vs Summers Says "High Possibility"

[Asia Economy New York=Special Correspondent Joselgina] Former and current U.S. economic leaders have once again delivered conflicting assessments regarding recession following last year's inflation concerns. Treasury Secretary Janet Yellen drew a line by stating that even if the U.S. experiences two consecutive quarters of negative growth, it is difficult to officially define it as a recession, whereas former Treasury Secretary Larry Summers warned that the possibility of a recession is very high.

On the 24th (local time), Secretary Yellen appeared on NBC's "Meet the Press" and said, "A recession is when the entire economy becomes vulnerable," adding, "We are not currently seeing such a situation." While acknowledging the possibility of slower job creation due to the Federal Reserve's rapid interest rate hikes, she emphasized that this cannot be considered a recession.

Recently, concerns have been mounting in the U.S. that a 'technical recession,' defined as two consecutive quarters of negative growth following the first quarter (-1.6%), could become a reality. The Atlanta Federal Reserve Bank's GDPNow, which compiles real-time data, estimated on the 19th that the U.S. second-quarter gross domestic product (GDP) growth rate would be -1.6% annualized.

In response, Secretary Yellen stated, "Even if the U.S. records two consecutive quarters of negative growth, I would be surprised if the National Bureau of Economic Research (NBER), which officially defines recessions, classifies this period as a recession," adding, "We have a strong labor market."

On the other hand, Larry Summers, a Harvard University professor and former Treasury Secretary under the Bill Clinton administration, appeared on CNN the same day and reiterated his warning that "the possibility of a recession is very high." He emphasized, "Recessions have always followed when inflation is high and employment is low," and stressed the need for strong measures by the central bank. He also called for administration-level actions to reduce inflation, such as easing tariffs on imports and controlling drug prices.

Professor Summers accurately predicted last year that inflation would become a bigger problem when Federal Reserve Chair Jerome Powell and Secretary Yellen underestimated inflation as a temporary phenomenon. Although the U.S. administration, including Secretary Yellen, publicly refuted his claims at the time, Summers' statements that "unprecedented inflationary pressures will be triggered" and "the Fed will lose control over inflation" ultimately proved to be correct.

This content was produced with the assistance of AI translation services.