Elon Musk, the CEO of Tesla and the head of Twitter, has foreshadowed a devastating U.S. recession. The billionaire emphasized the need for the Federal Reserve to “quickly” lower interest rates, stating that the Fed is “massively increasing the possibility of a severe recession.”
Elon Musk Issues Serious Recession Warning
Elon Musk, the CEO of Tesla and Twitter, issued a catastrophic recession alert for the United States on Wednesday.
Musk expressed concern about the pattern in a response to Vincent Yu, who had tweeted that he is “expecting a serious economic recession in 2023.” Musk emphasized that the Federal Reserve “has to decrease interest rates immediately.” According to the billionaire, the Fed is “massively increasing the probability of a severe recession.”
The conversation was joined by Sven Henrich, the founder and chief market strategist of Northmantrader. He responded to Musk and Yu by saying, “Ironically, despite all the evident signals, the Fed continues to anticipate positive GDP growth for next year. However, they repeated the action in 2008. Once the effects of the recession are felt, they will panic and cut rates and then place the blame on unanticipated events. Henrich explained in a different tweet:
The Fed completely misread inflation by remaining too lenient for an extended period of time. Now that they have tightened aggressively into the highest debt construct ever without taking into account the lag effects of these rate hikes, they run the risk of being even later than before to realize the damage done.
Sven Henrich, the company’s founder and chief market strategist, joined the discussion. “Ironically, despite all the clear indications, the Fed continues to forecast positive GDP growth for next year,” he said in response to Musk and Yu. But they did it once more in 2008. Once the repercussions of the recession become apparent, they will panic and lower rates before blaming unexpected occurrences. Henrich clarified in another tweet:
By being excessively accommodating for a protracted period of time, the Fed completely misread inflation. They run the risk of realizing the benefits of their aggressive tightening into the highest debt construct ever without accounting for the lag effects of these rate hikes.
They run the risk of realizing the damage even later than before because they aggressively tightened into the highest debt structure ever without considering the lag effects of these rate hikes.