With the economy still operating relatively smoothly and mounting evidence of inflation slowing, some economists who only a few months ago forecasted a historic recession are now tentatively optimistic. Chief among the reversals is Larry Summers: The former Treasury secretary who stated in June that a deep recession was the only remedy for soaring inflation is now positively upbeat, saying last week that the Federal Reserve’s job appears “much, much closer to being done.”
But while the economy is starting to flash positive signals of a soft landing, Summers is also urging central banks not to rest on their laurels. Reducing inflation without triggering a recession is a tricky game that the Fed has yet to win, he said.
