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Larry Summers Says Markets Braced for Stagnation and ‘Japanization’

  • Former U.S. Treasury chief says low interest rates boost risk
  • Summers says fiscal policy is gaining influence over economy
Larry Summers

Larry Summers

Photographer: David Paul Morris/Bloomberg

Former U.S. Treasury Secretary Larry Summers said global financial markets appear to be anticipating slow growth and low real interest rates for the next few years, which will gut the ability of central banks to guide economies.

“What markets are seeming to price is a return to secular stagnation, or Japanization,” Summers said in a lecture to the London School of Economics on Wednesday.