Elon Musk Warns of Severe Recession — Wednesday, Tesla CEO and Twitter CEO Elon Musk warned of a severe recession in the United States. Replying to Vincent Yu who tweeted that he is “expecting a real economic recession in 2023,” Musk said the trend is concerning, emphasizing that the Federal Reserve “needs to cut interest rates immediately.” The billionaire stressed that the Fed is “massively amplifying the probability of a severe recession.”
Sven Henrich, founder and the lead market strategist for Northmantrader, joined the discussion. He replied to Musk and Yu: “Ironically the Fed continues to project positive GDP growth for next year despite all the obvious signs. But they did the same thing in 2008. As always they will panic cut rates once the recession impact is here & then blame unforeseen factors.”
People Also Read: Federal Reserve Chairman Jerome Powell Faces Political Pressure Over Interest Rate Hikes
In another tweet, Henrich described: “The Fed stayed too easy for too long totally misreading inflation and now they’ve tightened aggressively into the highest debt construct ever without accounting for the lag effects of these rate hikes risking they’ll be again late to realize the damage done.”
Musk aggred, tweeting: “Exactly.” Many people agreed with Musk. One tweeted: “Musk is actually right about this. Inflation is now primarily being driven by housing, and interest rates are so high at this point they’re crashing investment in home construction, threatening to worsen the underlying problem.” Another wrote: “Correct. Higher rates hurt people. The notion of rate increases as an inflation hedge has always been sketchy.” Some people said the Fed “should be abolished.”
In October, Musk predicted that the recession might not end until the spring of 2024. He expressed his opinion in August that he thinks inflation has reached its peak and that we will be in a recession for the next 18 months. In September, the CEO of Tesla issued a warning that a significant increase in Fed rate could lead to deflation.
READ MORE
