“We have seen a sea change in perception in the two months since Trump was inaugurated,” said Summers, who was president of Harvard University from 2001 to 2006. When Trump came into office, “the prevailing view was a very strong economy, possibly inflation risk, and United States exceptionalism and outperformance relative to the rest of the world.
“But the combination of the substantial immigration restrictions, substantial federal government layoffs, the damage to U.S. competitiveness and U.S. production done by tariffication, and, above all, a big increase in risk premiums, have led to sharp reductions in consumer and business spending.”
Summers slammed Trump’s “steadfastness on tariffs, economic nationalism and vast, wide interpretation of government” reach for creating market uncertainty.
“Every time he recommits [to the tariffs], pessimism increases,” Summers said.