Tesla Motors CEO Elon Musk unveils a brand new all-wheel-drive model of the Model S automobile in Hawthorne, California October 9, 2014.
Lucy Nicholson | Reuters
Elon Musk thinks a recession is coming and worries the Federal Reserve’s makes an attempt to deliver down inflation may make it worse.
In a tweet early Wednesday, the Tesla CEO and Twitter proprietor referred to as on the Fed “to cut interest rates immediately” or threat “amplifying the probability of a severe recession.”
The remarks got here in an alternate with Tesmanian co-founder Vincent Yu by which a number of others participated.
Later within the thread, NorthmanTrader founder Sven Henrich observes that 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 replied, “Exactly.”
This is not the primary time Musk has warned of impending financial doom.
In an analogous alternate on Oct. 24, the world’s richest man estimated a world recession may final “until the spring ’24,” although he famous he was “just guessing.” That prediction got here amid a slew of financial warnings from different enterprise executives together with Amazon CEO Jeff Bezos, JPMorgan CEO Jamie Dimon and Goldman Sachs CEO David Solomon.
The Fed seems to be coming into the late phases of a rate-hiking marketing campaign aimed toward tackling inflation nonetheless operating close to its highest stage in additional than 40 years. The central financial institution has elevated its benchmark fee half a dozen instances this yr, taking the in a single day borrowing fee to a goal vary of three.75%-4%, and is anticipated to hike just a few extra instances earlier than stopping.
In latest days, Fed officers have mentioned they anticipate smaller will increase forward than the 4 consecutive 0.75 share level will increase, the newest of which got here in early November. Fed Chairman Jerome Powell is addressing the general public Wednesday afternoon in a speech to be delivered on the Brookings Institution.