Elon Musk Doubles Down on Scary Prediction About What Could Amplify US Recession

Elon Musk has reiterated his warning on the U.S. recession recently on Twitter, wherein he tweeted that the recession will be "greatly amplified" if the federal government raises the rate again next week.

Musk made the same sentiments in November when he said that the Federal Reserve's tries to bring down inflation could make it worse.

In November, he also tweeted that the Federal Reserve needs to cut interest rates immediately as they are "massively amplifying" the probability of severe recession.

The central bank has upped its benchmark rate half a dozen times this year and is expected to hike a few more times before stopping.

The Fed has been entering the late stages of rate-hiking aimed to address inflation, which is still near its highest level in more than 40 years.

In September, the Federal Reserve has been tightening into a recession, with the economy slowing quickly for the first time since the early 1980s.

Federal Reserve Chair Jerome Powell said that the chances of a "soft landing are likely to diminish.

U.S. Recession and Federal Reserve

Powell noted in a PBS NewsHour report that no one knows whether the process will lead to a recession or how significant that recession would be.

The Fed chair added that he wishes there was a "painless" way to get inflation behind, but that there is no way to do that.

Powell made the statement after the Feds had substantial three-quarters of a point rate hike, which is the third straight.

The Fed officials expect to raise the rate again next year to about 4.6%, which would be the highest level since 2007.

It becomes costlier to take out a mortgage or an auto or business loan when the Fed raises borrowing rates. It then leads consumers and businesses to borrow and spend less.

Aside from the Federal Reserve, Sweden's central bank also raised its key interest rate by a full point while the European Central Bank announced its largest-ever rate increase with a three-quarter-point hike. The hike applies to the 19 countries using the euro currency.

In Powell's August speech, he warned that the Fed's moves will "bring some pain" to individuals and businesses.

Elon Musk and U.S. Recession

In October, Musk said that he thinks the global economic recession could last for another year and a half.

The new Twitter CEO said in a tweet that the recession could continue "until spring of '24."

Aside from Musk, JPMorgan Chase CEO Jamie Dimon also issued a warning of economic turmoil ahead. He said that inflation and rate hikes are "eroding everything" despite savings and government aid during the pandemic.

General Motors CEO Mary Barra also projects some economic headwinds but did not raise concerns about a recession just yet.

Meanwhile, Walmart CEO Doug McMillon said he does not want a recession but thinks it might be a "necessary evil" to curb inflation for his customers.

McMillion has been reported as not spending more in certain categories in Walmart such as electronics and toys.

This article is owned by Latin Post.

Written by: Mary Webber

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