Elon Musk warns that a Fed Rate hike will amplify the recession
Twitter CEO Elon Musk stated that the next US Federal Reserve rate increase will only exacerbate the recession. A Twitter exchange revealed that Elon Musk, the world’s wealthiest man and chief executive of Tesla Electric Cars, said that the next US Federal Reserve rate hike will worsen the recession.
The recession will be exacerbated if the Fed raises rates next week.
— Elon Musk (@elonmusk), December 9, 2022
After some time, Michael Saylor replied to Elon Musk’s post.
The Fed is the global economic pilot. The Suicide Mission from Top Gun 2: Monetary Policy (US01Y), has been in place for five years. (1) We coast into the pandemic (2) we crash the currency (3) we decouple reality (4) almost take the wings off (5) let’s hope that we don’t blackout. pic.twitter.com/2uAFD6BUI4
— Michael Saylor (@saylor), December 9, 2022
Elon Musk predicted in October that the recession would last until the spring of 24, earlier this year. Tesla Owners Silicon Valley questioned Musk on Twitter. He replied that he was just guessing, but it would probably last until the spring of 24.
Economists predict that the Federal Reserve will announce the final hike for 2022 in the next week. Jerome Powell, Fed Chair, suggested that the central bank’s benchmark rate of interest will likely be increased by a smaller amount when it meets next week. It is not clear if the rate hike will be 0.5 or 0.75 percentage point. On December 14, the US Federal Reserve will announce its interest rates.
In an effort to control inflation, the Federal Reserve announced last month a fourth consecutive 0.75 percent rate hike in November.
The recession as seen by economists
Many economists believe that a recession will be more likely in 2023 due to continued rate increases, which discourage borrowing. A Bloomberg survey surveyed 42 economists and found that 60% of them believe there will be a recession in the next year.
The cost of goods rose 0.1% between October and November while wholesale gas prices dropped by 6%. (Food prices rose 3.3% last month due to higher-priced vegetables, chicken, and eggs.
However, the cost of services increases by 0.4% due to higher prices for financial services. The US government’s most well-known inflation indicator, the consumer price index, will be published. The most recent CPI report for October showed that prices were up 7.7% compared to a year ago. This indicates that inflation has slowed down. This was the lowest comparison figure since January despite the fact it was still high.
Also read: Elon Musk Announces a Twitter Update; How It Will Affect Users
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