Higher inflation will force consumers to limit their spending by so much that the economy will slump into a recession by the July-September quarter, former Federal Reserve Governor Lawrence Lindsey said on Monday.
“I do think we’re going to have a recession, probably in the next quarter,” Lindsey said, in an interview on CNBC.
“Inflation is eating into consumer spending power, they’re going to have to cut back,” he said.
The former Fed governor also said the U.S. central bank was “nowhere close” on being able to control inflation.
Lindsey said he was worried that inflation was poised to move higher — and there could soon be monthly prints of the CPI above 1%. Consumer inflation hasn’t risen 1% or more for two straight months since the summer of 1980.
“That’s going to push consumer purchasing power down by about 2 points on top of the 2.5 points it has already declined…