WASHINGTON (NEXSTAR) — The Biden administration is facing growing concerns from economists who fear rising inflation could spark a recession.
Americans continue to face rising prices, from the grocery store to the pump. U.S. inflation hit 7.9% in February, yet another 40-year high rate
Economists are split over whether the Biden administration can turn things around before it’s too late.
Former Treasury Secretary Larry Summers said Americans may need to brace for a recession as early as next year.
“The painful fact is … that historically when we’ve had inflation above four … and we’ve had employment below four since World War Two that’s been followed by a recession,” he said on NBC’s Meet the Press.
Summers worked for Former President Bill Clinton, a Democrat. But Summers told NBC’s Meet the Press he agrees with Republicans, who blame Democrat’s multi-billion dollar spending bills for sky rocketing prices.
“We were injecting too much demand into the economy,” Summers said.
Summers said the only hope is if the Federal Reserve can find a way to raise interest rates and gently slow down business investment and consumer spending.
“It’s not going to be easy,” Summers said.
On CBS’ Face the Nation Loretta Mester, president of Cleveland’s Federal Reserve, said she’s confident consumers will get a break next year.
“I think inflation will remain above 2% this year and even next year, but the trajectory will then be moving down,” Mester said.
On Fox News Sunday White House Press Secretary Jen Psaki said the Biden administration is working to combat historic inflation.
“(We’re) going to constantly monitor our economic data,” Psaki said.
But she said many Americans still need help recovering from the pandemic. The Biden administration extended the federal pause on student loan payments through August this past week.
Senate Minority Leader Mitch McConnell, R-Ky., told Fox News delaying payments only adds more fuel to the fire.
“It’s exactly the wrong thing to do,” McConnell said. “This administration just can’t seem to get their act together on the economy.”
The federal government will release March inflation numbers on Tuesday.