Former Treasury Secretary Larry Summers says it's 'more likely than not' US will enter recession

Washington(CNN) Former US Treasury Secretary Larry Summers said Thursday it's "more likely than not" the US will enter a recession, calling it a consequence of the "excesses the economy has been through."

"Historical experience suggests that the kind of inflation we have rarely returns to normal levels -- target levels of around 2% -- without some kind of recession," Summers told CNN's Wolf Blitzer on "The Situation Room."

"Now, I don't think that means we're going to have something like we had after Covid or something like we had during the [2008] financial crisis, but I do think that we had a period of very substantial stimulus and I think the other side of that is likely to be a downturn," he added.

The US economy has been flashing warning signs for months. Stocks and bonds are both in bear territory, and many analysts say the market could remain volatile until inflation gets under control. Overall, the economy shrank by 0.6% during the second quarter of the year, according to the latest gross domestic product estimate from the Bureau of Economic Analysis.

Some economists and policymakers have rebuffed claims of an early 2023 recession, citing robust job growth, consumer spending and manufacturing. And last month, Federal Reserve Chairman Jerome Powell argued during a news conference that there is still a path to getting inflation under control without sparking a downturn.

However, even Powell concedes that path has gotten narrower as the Fed has been forced to resort to drastic interest rate hikes to knock down inflation.

Summers on Thursday specifically cited the OPEC+ decision to dramatically cut its oil output targets as a risk to the US economy. "This is not good news that we've gotten from OPEC. It increases the risks with respect to inflation. It increases the risks with respect to recession," he said.

The group of major oil producers, which includes Saudi Arabia and Russia, said Wednesday that it will slash oil production by 2 million barrels per day, the biggest cut since the start of the pandemic, in a move that threatens to push gasoline prices higher just weeks before US midterm elections.

The Biden administration criticized the OPEC+ decision in a statement on Wednesday, calling it "shortsighted" and saying that it will hurt low and middle-income countries already struggling with elevated energy prices the most.

"The way we've got to think about this is not managing with a fire drill every time we have some oil price problem," Summers said. "It's reducing our fundamental dependance on unstable and problematic parts of the world for our energy."