Elon Musk warns of severe recession — urges the Fed to immediately reduce interest rates
Elon Musk, Tesla CEO and Twitter boss, has warned of a severe economic recession in the United States. Musk, a billionaire, stressed that the Federal Reserve must immediately reduce interest rates. He also highlighted that the Fed is “massively amplifying” the likelihood of a severe recession.
Elon Musk warns about severe recession
Elon Musk, Tesla CEO and chief Twitter officer, warned Wednesday about a severe recession.
Vincent Yu tweeted that he “expects a real economic crisis in 2023”, Musk responded that the trend was concerning and that the Federal Reserve “needs” to immediately reduce interest rates. Musk, a billionaire, stressed that the Fed “massively amplifies the likelihood of a severe economic recession.”
Sven Henrich was the founder and lead market strategist at Northmantrader. He joined the discussion. Musk and Yu were retorted by Yu: “Ironically, the Fed continues to project positive growth in GDP for next year despite all the obvious indicators. They did the same thing in 2008, however. They will panic reduce rates once the recession impacts are here, and then blame unforeseen circumstances.” In another tweet, Henrich described:
The Fed was too easy for too long, completely misreading inflation. Now they are aggressively building the largest debt structure ever without accounting for the lag effect of these rate increases. They may be late to realize the damage they have done.
Musk agreed, tweeting: “Exactly.”
Musk was endorsed by many. One tweet stated that Musk is correct about this. Housing is the main driver of inflation. At this point, interest rates are so high that they’re crashing home construction investment, which could lead to a worsening of the problem. Another wrote: “Correct. Higher rates are bad for people. Rate increases as an inflation hedge have always been a questionable idea. Some people suggested that the Fed should be “abolished.”
Musk predicted that the recession could last until spring 2024 in October. He stated that he believes inflation is at its peak and that we will be in recession for 18 more months. The Tesla boss warned in September that a significant Fed rate increase could lead to deflation.
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