Billionaire CEO of Tesla and Spacex Elon Musk has warned that the recession will be “massively amplified” if the US Federal Reserve raises interest rates again next week. He added that in the second quarter of 2024, “it will probably start to get better.”
Tesla CEO Elon Musk talks about recession and Fed rate hikes
Tesla CEO and Twitter chief Elon Musk Trump said on Friday that the Federal Reserve will meet next week. He tweeted that another rate hike “would greatly amplify the recession.”
Musk was also asked on Twitter how long he thought the recession would last. Tesla boss replied:
It’s a rough guess, but maybe he’ll start improving in the second quarter of 2024.
Federal Reserve Board Rate Hike. At the end of November, the billionaire said the trend worried him. He urged the Federal Reserve to cut interest rates immediately, saying the central bank “significantly increases the likelihood of a deep recession.”
He agreed with Kathy Wood, his CEO at Ark Invest, that the Fed’s actions could lead to a Great Depression like his 1929.
After raising rates by 75 basis points four times in a row, Federal Reserve Chairman Jerome Powell suggested a 50 basis point hike in December. “It makes sense to slow down the pace of rate hikes as the Fed approaches levels of containment sufficient to keep inflation in check,” said Powell.The Federal Reserve is expected to announce its decision on Wednesday after a two-day Federal Open Market Committee (FOMC) meeting.
According to Gold Bug’s Peter Schiff, “There is no risk that the Fed will tighten too much unnecessarily and trigger a recession, because the Fed believes a strong economy will keep inflation from falling. ” He explained in a tweet last week: ”The risk is that the Fed will pivot too soon because it erroneously believes the current recession will worsen and inflation will fall.”
Some, including analysts at Citigroup, expect a modest recession in 2023. An impending recession “will be less severe, but more meaningful,”and, David Baillin, chief investment officer and head of Citi Global Wealth Investments. said. But some, such as veteran investor Jim Rogers, are predicting a deep recession.
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