Elon Musk urges Fed to Reduce Interest Rates, or risk a severe US Recession

• Elon Musk has called on the Federal Reserve to immediately reduce interest rates.
• Tesla CEO and Twitter CEO stated that central bank hikes have significantly increased the likelihood of a crisis.
• Musk recently predicted that the US will experience a severe recession for at least a year.

Elon Musk has urged the Federal Reserve to reduce interest rates as soon possible. Musk warned that this is because of the rapid rises in interest rates this year, which have greatly increased the likelihood of an American economic downturn.

“Trend is concerning”, Tesla, SpaceX and Twitter CEOs. replied Twitter user, Wednesday, shared his prediction of a recession in the next year.

Musk stated, “Fed must cut interest rates immediately.” Musk continued, “They are enormously increasing the probability of a severe depression.”

Inflation reached 40-year highs in this year’s year. This prompted the Fed to raise rates from almost zero in march to around 4% today and signal that rates could peak at above 5% next. Higher interest rates discourage borrowing and spending and can reduce growth and unemployment.

Musk previously warned that the US’ economy was in danger of shrinking. Musk stated that there will be a recession for at least a year during his meeting with Twitter employees earlier in the month.

In an email to Twitter staff, he described the economic background as “dire” and stated that Twitter faces a “challenging economy climate”.

During Tesla’s October third quarter earnings call, the billionaire tech executive complained about excessive rate increases.

He said that “The Fed isn’t listening” because they are looking at the rearview reflector instead of the front windshield. This means that the central bank is too focused upon lagging economic data rather than current conditions.

Musk is among several corporate chiefs who have raised the alarm on the recession in recent days. Jeff Bezos (Amazon founder), Jamie Dimon (CEO of JPMorgan) and David Solomon (CEO Goldman Sachs) have all published dire economic outlooks.