Former US Treasury Secretary Summers' 2007 warning

Former US Treasury Secretary Larry Summers stated that a level of anxiety similar to August 2007, when the first signs of the collapse in the US housing market were seen, could also be valid today. Fed officials, on the other hand, continued their hawkish messages that put aside the possibility of a recession and prioritized price stability. Former US Treasury Secretary Lawrence Summers likened the risks facing the global economy to the summer of 2007. Speaking to Bloomberg TV, Summers stated that a level of anxiety similar to August 2007, when the first signs of the collapse in the US housing market were seen, could also be valid today, and said, “There is no sign that markets are deteriorating except in the UK. However, in an environment of extreme volatility, many markets may deteriorate.” Summers cited Russia’s invasion of Ukraine and the fluctuations in commodities originating from China, high core inflation, uncertainty in economic policies and a heavy debt burden as fragile areas. Stating that a high degree of turmoil in a country like the UK, which has a large economy, would have consequences that go beyond the UK, Summers said, “I would not be surprised to see similar problems elsewhere.”