Asked if he agrees with Trump’s focus on strengthening the U.S. economy in the long term, Summers likened it to the Biden administration’s and the Federal Reserve’s initial dismissal of the severity of inflation.
“I don’t think the idea that this is some kind of transition period is going to work out very well at all,” Summers said.
As to what investors should pay attention to when deciding how to allocate their portfolios, Summers pointed to forward-looking data, including business orders, consumer sentiment, commodity prices and equity analyst forecasts. If downward revisions in any of these gains momentum, it could be a recession signal, Summers said.