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Former Treasury Secretary Lawrence Summers said on Sunday that a recession is likely within the next two years.

The former Obama administration official's prediction comes on the heels of an unexpected jump in the inflation rate announced on Friday. Summers's statement stands in contrast to Treasury Secretary Janet Yellen's claim last week that a recession is not in the works.

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I think theres certainly a risk of recession in the next year, Summers said on CNN's State of the Union on Sunday. I think given where weve gotten to, its more likely than not that well have a recession within the next two years.

Summers, who served as treasury secretary under former President Bill Clintonand as director of the National Economic Council under former President Barack Obama, has been outspoken in warning that President Joe Biden's economic policies are damaging the country.

In March 2021, Summers blasted Biden's $1.9 trillion American Rescue Plan as the least responsible macroeconomic policy weve had in the last 40 years and warned that it would set off inflationary pressures of a kind we have not seen in a generation."

Inflation soared to 8.6% for the 12 months ending in May, the Bureau of Labor Statistics revealed on Friday, despite the Federal Reserve's interest rate hikes.

There are concerns that the Feds aggressive interest rate hikes, in an effort to stave off inflation, could plunge the economy into a recession.

Sen. Rand Paul (R-KY) predicted last week that the Fed would continue to raise interest rates until they reach the level of inflation.

I think the Federal Reserve is going to keep putting [interest rates] up a half a point every time they meet. I think that happens probably every four to six weeks until they reach the inflation rate," Paul said last week. "And inflation rate is 8.5%, and we're closer to the Fed funds rate being around 3% or so."

I think that that's in our future, but I think a recession and high unemployment is, too, and that's the way inflation gets cured," Paul added.

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Yellen, however, dismissed talk of a recession last week, saying, Dont look to me to announce it, while insisting that the fundamentals of the economy are strong as inflation rages.

Im not going to announce it. I dont think were going to have a recession, she said. Consumer spending is very strong. Investment spending is solid. I expect growth to slow down. We have a very strong economy. I know people are very upset, and rightfully so, about inflation. But theres nothing to suggest inflation if a recession is in the works.

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Summers: US recession likely within two years - Washington Examiner