Days after Amazon’s Jeff Bezos warned of an impending recession, his billionaire counterpart Elon Musk said on Wednesday that the US Federal Reserve’s actions were “broadly increasing the likelihood” of a severe recession.
Musk’s comments on Twitter clashed with Tasmanian co-founder Vincent Yu, who said he was “expecting a real economic downturn in 2023, be prepared for any major storms ahead of us”.
Musk said“The trend is concerning. The Fed needs to cut interest rates immediately. They are massively increasing the likelihood of a severe recession.”
Musk said ‘absolutely’ on a tweet from Sven Henrik, founder of NorthManTrader, who wrote, “The Fed has been too easy for far too long to read inflation completely wrong and now they have to account for the lag effects of these rates.” Aggressively tightened the highest debt creation without accounting. It will be too late to realize the damage they have done by climbing the risk of life.”
In a similar exchange on October 24, the world’s richest man speculated that the global recession could last “until spring ’24”, although he said he was “just speculating”.
In recent days, Fed officials have said they expect further smaller increases this year than four consecutive 75 basis point increases. Fed Chairman Jerome Powell will address the public on Wednesday afternoon (US time) in a speech at the Brookings Institution.
Those will be Powell’s last public comments before the Brookings panel’s Dec. 13-14 meeting, when officials are expected to approve a half-percentage-point rate hike that would bring this year’s total policy rate to 4.25 percentage points, including Kickoff 25 is also included. Basis-point hike on March 16.
Bezos recently warned consumers and businesses in an interview with CNN that they should consider postponing major purchases in the coming months as an economic downturn looms.
The billionaire told American families not to buy new cars and TVs as America is in recession, household debt has risen to $16.5 trillion and Americans are dependent on credit to meet their needs.
“My advice to people, take some risks off the table. If you’re going to go shopping, maybe slow that shopping down a bit. Put that cash in, see what happens — take some risk off the table,” Bezos advised.
“If you’re a person considering buying a big screen TV, you might want to wait, put your money on hold, and see what happens. The same is true with. Just remove some of the risk from the equation,” Bezos said during the interview.
Read also: ‘Don’t buy TV, fridge, keep your money,’ Jeff Bezos sees recession coming
