Summers says Fed impacting US economy

Former Treasury Secretary Lawrence Summers has said there is evidence that Fed rate rises are having an impact on the US economy.

Speaking to Bloomberg TV Summers said, “We’re seeing a little bit of indications that some firms are no longer reporting the kind of huge labor shortages that they were before. We’re seeing some indications of inventory buildups.”

He added that the US economy is now “very stretched” and that historically when US inflation has been above 4% and unemployment is below 4% a recession occurs within two years. “My best guess would be that’s what we’ll see this time round,” he said.