The recession will intensify significantly if the Fed raises rates next week – Economic Bitcoin News
Billionaire Elon Musk, CEO of Tesla and Spacex, has warned that the recession will be “greatly intensified” if the Federal Reserve raises interest rates again next week. He added that things will “probably start to look better” in the second quarter of 2024.
Tesla CEO Elon Musk on recession and Fed rate hike
Tesla CEO and Twitter boss Elon Musk reiterated his warning of a US recession. He tweeted on Friday that if the Federal Reserve raises interest rates again next week, “the recession will intensify significantly.”
Musk was further asked on Twitter how long he thought the recession would last. The Tesla boss responded:
Just a rough guess, but things probably start to look better in the second quarter of 2024.
It wasn’t the first time Musk warned about the consequences of a Fed rate hike. In late November, the billionaire said the trend was worrying. He urged The Federal Reserve cut interest rates immediately, saying the US central bank was “massively increasing the likelihood of a severe recession”.
He agreed with Ark Invest CEO Cathy Wood that the actions of the Fed It could lead to similar to the Great Depression of 1929.
Federal Reserve Chairman Jerome Powell signaled a 50 basis point interest rate hike in December after four consecutive 75 basis point hikes. “It makes sense to moderate the pace of our interest rate hikes as we approach the cap level that will be sufficient to reduce inflation,” Powell said. Fed officials will announce their decision on Wednesday after a two-day meeting of the Federal Open Market Committee (FOMC).
According to gold strategist Peter Schiff, “the risk is not that the Fed will trigger a recession by unnecessarily tightening too much because it thinks a strong economy will keep inflation from falling.” He explained in a tweet last week: “The risk is that the current recession will worsen, causing the Fed to turn too early as it mistakenly believes that inflation will decline.”
Some people expect a mild recession in 2023, including analysts at Citi Group. The coming recession ‘won’t be as deep, but it will make sense’ said David Beilin, Chief Investment Officer and Head of Citi Global Wealth Investments. However, some expect a severe recessionincluding a veteran investor Jim Rogers.
Do you agree with Elon Musk? Let us know in the comments section below.
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