Tesla Motors CEO Elon Musk unveils a recent all-wheel-drive version of the Model S automotive in Hawthorne, California October 9, 2014.
Lucy Nicholson | Reuters
Elon Musk thinks a recession is coming and worries the Federal Reserve’s attempts to bring down inflation could make it worse.
In a tweet early Wednesday, the Tesla CEO and Twitter owner called on the Fed “to chop rates of interest immediately” or risk “amplifying the probability of a severe recession.”
The remarks got here in an exchange with Tesmanian co-founder Vincent Yu through which several 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 best debt construct ever without accounting for the lag effects of those rate hikes risking they’ll be again late to understand the damage done.”
Musk replied, “Exactly.”
This is not the primary time Musk has warned of impending economic doom.
In an identical exchange on Oct. 24, the world’s richest man estimated a world recession could last “until the spring ’24,” though he noted he was “just guessing.” That prediction got here amid a slew of economic warnings from other business executives including Amazon CEO Jeff Bezos, JPMorgan CEO Jamie Dimon and Goldman Sachs CEO David Solomon.
The Fed appears to be entering the late stages of a rate-hiking campaign aimed toward tackling inflation still running near its highest level in greater than 40 years. The central bank has increased its benchmark rate half a dozen times this yr, taking the overnight borrowing rate to a goal range of three.75%-4%, and is predicted to hike a number of more times before stopping.
In recent days, Fed officials have said they expect smaller increases ahead than the 4 consecutive 0.75 percentage point increases, essentially the most recent 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.