Summers warns biggest economies unprepared for next downturn

Lawrence Summers is one of two candidates said to poised for the job of new Federal Reserve chairman.

SINTRA (PORTUGAL): Former US treasury secretary Lawrence Summers warned that developed countries are badly equipped for another recession, both economically and politically, and central banks should be wary of raising interest rates just to stop inflation running slightly hot.

“The consequences of another economic downturn dwarf and massively exceed any adverse consequences associated with inflation pushing a bit above 2%,” Summers said at a European Central Bank (ECB) conference in Sintra, Portugal.