Larry Summers overlaid today's inflation on the 1970s and everyone called it a "chart crime." Then history repeated itself. With the same country.

The Briefcase Team | April 8, 2026

In the summer of 2023, Larry Summers - former Treasury Secretary, former Harvard president, and full-time guy who ruins cocktail parties with correct predictions - posted a chart. It showed that America's inflation trajectory was tracking the mid-1970s almost perfectly. The pattern matched the years right before the second, much worse inflation spike.

Economists called it a "chart crime." A coincidence. A visual parlor trick. After all, they said, that second spike in the '70s was caused by a specific, unrepeatable event: a conflict with Iran that shut down oil markets.

(You can already see where this is going.)

Three years later, the United States is in a military conflict with Iran. The Strait of Hormuz is functionally closed. Oil is above $100. And Summers has been quietly circulating an updated version of that chart with a dotted line showing market-implied inflation forecasts. The dotted line tracks the 1979 spike.

The "chart crime" is now a confession.

Summers has been irritatingly right so often it should qualify as a personality disorder.

In 2021, he warned that Biden's $1.9 trillion stimulus would overheat the economy. His own party told him to sit down. Inflation hit 9.1%.

He then rejected the Fed's insistence that inflation would be "transitory." The Fed spent 18 months pretending he was wrong before raising rates at the fastest pace in four decades.

Under Trump, he warned that DOGE wouldn't actually save money (still hasn't) and that tariffs could push toward stagflation. Inflation came down to 2.4% by February 2026, and then the bombs started falling and it stopped coming down.

Now, according to Semafor's Ben Smith, Summers has been telling associates that the American fiscal situation would be "worryingly fragile, and on the brink of a crisis, even without a war."

Imagine telling your doctor you feel fine, and then your doctor shows you a chart from 1976 and says "so did they."

Here is where this gets technical for about 30 seconds, and then it gets terrifying.

The "neutral rate" is the interest rate that keeps the economy in balance; not too hot, not too cold. The Goldilocks rate, except Goldilocks has a PhD and strong opinions about fiscal multipliers.

The Fed thinks it's 3%. Trump appointee Stephen Miran says 2.5 to 2.75%. Summers thinks it's 4.5%.

Why does this matter? Because if Summers is right, the Fed is not actually holding the brakes by keeping rates steady. It is hitting the gas and speeding the economy toward another inflation wave while congratulating itself on prudent monetary policy.

That's like a pilot announcing smooth cruising altitude while the altimeter shows a nosedive. The plane feels fine. The ground is getting closer.

Semafor's piece closes with something called Dornbusch's Law, named after economist Rudi Dornbusch (a Summers collaborator): "Financial crises take longer than you expect to arrive, but then happen faster than you thought possible."

The article adds: "You never really find out that you're Liz Truss until it's too late."

For anyone who missed the UK's 2022 financial meltdown (lucky you), former PM Liz Truss announced £45 billion in unfunded tax cuts. Bond markets panicked. Gilt yields spiked 50 basis points in a single day. Pension funds nearly collapsed. She lasted 49 days. The UK is still dealing with the fallout four years later, according to Goldman Sachs.

Now look at the American version: a heavily indebted government that can't raise taxes (populist politics), can't cut spending (DOGE failed, and now defense spending has to increase for the war), and is watching foreign investors edge away from Treasury bonds.

And it needs to keep borrowing. The US government sold $651 billion in Treasury securities in a single week in March. Total debt is forecast to exceed $50 trillion over the next decade. When the world's biggest borrower also has the world's biggest inflation problem, the interest rate on your mortgage is not a spectator.

So what happened to housing the last time Summers' chart came true?

Mortgage rates went from 7.5% in 1971 to 11.2% by 1979. Then the second inflation spike hit and they kept climbing to 18.6% by October 1981. That is not a typo. Eighteen point six percent on a 30-year fixed. Monthly payment on a $400,000 home at that rate? Roughly $6,200. (At today's 6.46%, that same home costs $2,520. Do the math on the difference and try to sleep tonight.)

We are not there yet. But as HousingForward Virginia noted, the parallels are now "more prescient than criminal." The 30-year fixed has already reversed from 5.98% in late February to 6.46% as of last week. The 10-year Treasury yield jumped to 4.28%. The bond market has priced out all rate cuts for 2026. RBC Economics warned that if oil stays near $100, headline inflation will surpass 3% by Q2 and stay there through the year.

Morgan Stanley's forecast for rates to hit 5.5% by mid-2026? That was published in January. Before the war. Before the oil shock. Before the chart started tracking 1979 again.

It now reads like a postcard from another timeline.

Larry Summers drew a chart in 2023 showing that today's inflation was mirroring the 1970s. Everyone laughed. Then the U.S. went to war with Iran - the same country whose revolution caused the 1970s spike - and the chart kept tracking. Summers now believes the neutral interest rate is 4.5%, which means the Fed thinks it is braking but is actually accelerating into an inflation wall.

The last time this movie played out, mortgage rates went from 7% to 18%. We are at 6.46% and climbing. The bond market has priced out all rate cuts for 2026. And Dornbusch's Law says financial crises take longer to arrive than you expect, then happen faster than you thought possible. The chart says we are somewhere around 1978. What comes next rhymes with 1979. And your mortgage payment is the first verse.