The Tesla CEO has called for an ‘immediate’ rate cut to prevent a recession.
Tesla and Twitter boss Elon Musk has called on the US Federal Reserve to slash the key interest rate as soon as possible in order to avoid a severe recession. He added that the regulator’s latest attempts to bring down inflation could make the situation worse.
The critical remarks, published on Musk’s Twitter account on Wednesday, came in an exchange with Tesmanian (Tesla Accessories and News) portal co-founder Vincent Yu in which several other executives participated.
“Trend is concerning. Fed needs to cut interest rates immediately. They are massively amplifying the probability of a severe recession,” Musk posted.
The tweet was reposted by Yu, who said he was “expecting a real economic recession in 2023… prepare for any macro storm ahead of us.”
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,” NorthmanTrader founder Sven Henrich posted later in the thread.
The Fed had previously taken several drastic steps to tackle the highest US inflation in more than four decades. So far this year, the regulator has hiked its benchmark rate half a dozen times, taking the overnight borrowing rate to a target range of between 3.75% and 4%. The regulator is expected to maintain its hawkish stance and raise the rate a few more times before stopping.
The world’s richest man warned of impending economic downfall last month. In a similar exchange on October 24, Musk estimated a global recession could last “until the spring ’24,” noting, however, that he was “just guessing.”
This artical was originally published by RT.