Elon Musk says ‘recession will be amplified if…’

Billionaire Elon Musk thinks the recession will be amplified if the US Fed will raise the rates next week. In a Twitter exchange, the mercurial electric car executive and the world’s richest man said, «If the Fed raises rates again next week, the recession will be greatly amplified».

Earlier, in October this year, Musk projected that the recession could continue «until spring of ’24».

A Twitter account named Tesla Owners Silicon Valley asked Musk in October how long he thought the recession would last, to which he replied, “Just guessing, but probably until spring of ’24.»

The Federal Reserve is likely to announce the last hike of 2022 in the upcoming week according to economists.

Fed Chair Jerome Powell also signaled that the central bank will likely raise its benchmark interest rate by a smaller increment when it meets next week.

However, the rate hike, whether it’s 0.5 or 0.75 percentage points hangs in the balance. on December 14, the US Fed rates will be announced.

Struggling to dampen inflation, the Federal Reserve last month announced a fourth consecutive 0.75 percentage point rate hike in November.

As successive rate increases discourage borrowing, many economists think that a recession is more likely in 2023.

According to a Bloomberg survey, 42 economists predict the probability of a recession over the next year is now 60%.

Yesterday wholesale prices in the United States rose 7.4% in November from a year earlier.

The cost of goods rose just 0.1% from October to November, with wholesale gas prices tumbling 6%. (Food prices were an exception: They jumped 3.3% last month, fueled by costlier vegetables, eggs, and chicken.)

By contrast, services prices rose more, up 0.4%, led mostly by more expensive financial services.

Next week, the US government will report its highest-profile inflation figure, the consumer price index. The most recent CPI report, for October, showed a moderation in inflation, with prices up 7.7% from a year earlier. Though still high, that was the lowest year-over-year figure since January.

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