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Ex-Treasury Head: Recession More Likely Now Than Six Months Ago

What are the odds of a recession in the U.S.? "Under 50-50," according to Lawrence Summers. The Harvard professor, managing director of D.E. Shaw and former Treasury secretary (under President Bill Clinton) joined CNBC's Maria Bartiromo on "Closing Bell" to offer some sobering predictions.

Summers said that the slowdown in housing and the rise of subprime defaults could trigger "a number of different vicious cycles" -- and he believes that the problems in Alt-A mortgage loans signal a leakage from subprime into the rest of the sector.

On the question of interest rates, Summers held off from prescribing a cut or a hike. Instead, he said the Federal Reserve must "be very nimble and driven by events" -- and resist being obsessed solely with recession or inflation.