(Bloomberg) -- Former Treasury Secretary Lawrence Summers urged the Federal Reserve to realize the seriousness of inflation that has accelerated to a 40-year high when policy makers meet this week, as risk of recession sits on the horizon. 

“When inflation is as high as it is right now and unemployment is as low as it is right now, it’s almost always followed within two years by recession,” he said on CNN’s “State of the Union” on Sunday. When it comes to inflation, “the Fed’s forecasts have tended to be much too optimistic there, and I hope they’ll realize fully the gravity of the problem.” 

Summers pointed to risk for a recession within the next year, though said it’s “more likely than not” to occur within the next two years.

Summers, who has been predicting high inflation since last year, said the path for inflation depends on President Vladimir Putin’s war in Ukraine and its effect on oil prices. US consumer prices accelerated 8.6% from a year earlier in May, a sign that price pressures are becoming entrenched in the economy. 

“There’s a risk that it’ll rise higher, and I don’t think it’s likely to fall back very, very rapidly,” said Summers, a Harvard University professor who’s also a paid contributor to Bloomberg TV.

For President Joe Biden’s administration, Summers said there’s “not a lot” to do to bring down gas prices topping $5 per gallon as the war in Ukraine continues.  

The US could pursue more “strategic” tariff policies with China that would help lower prices for American consumers and producers, according to Summers. He also advocated for bipartisan legislation that would raise Trump-era tax cuts, tax corporations adequately and reduce prescription drug prices -- all moves that would bring down consumer prices.

Summers blamed Republicans for downplaying the storming of the U.S. Capitol by supporters of former President Donald Trump on Jan. 6, 2021, saying it undermines the basic credibility of US institutions, which “feeds through on inflation.” 

“If we can’t trust the country’s government, why should we trust its money,” he said. 

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