Summers sees ‘tumult’ in 2023 with reckoning for bond market

Bloomberg/Chris Antsey/1-6-2023

“Former Treasury Secretary Lawrence Summers warned that the assumption embedded in the bond market that the era of low interest rates — anchored by disinflationary pressures — is coming back is likely to be wrong.’I suspect tumult” for markets in 2023, Summers told Bloomberg…. ‘This is going to be remembered as a ‘V’ year when we recognized that we were headed into a different kind of financial era, with different kinds of interest-rate patterns.'”

USAGOLD note: Many on Wall Street think the factors that held down inflation in the past will return. Summers says “those assumptions are likely to be wrong,” and explains why at the link. “I’m not sure that continued strength points to a softer landing, rather than pointing to even a harder landing when things re-equilibrate,” he says. Summers is a former secretary of the Treasury and White House economics advisor.