According to Larry Summers and others, history tells us that a recession is inevitable, the level of job vacancies notwithstanding. Are they right?
No, because inflation is being driven by highly unusual circumstances: cost increases due to persistent supply chain problems and the Ukraine war; and demand fueled by a mountain of private savings accumulated during the pandemic. As I’ve noted many times before, the Fed can’t do anything about either of those phenomena; it can only bring down inflation by crushing asset prices and, presumably, consumer confidence.
If the supply chain problems ease over time and spending from savings continues at a relatively high level, a recession can be avoided; the history cited by Summers is not really an adequate guide here. Will that happen? I don’t know, and neither do you.