Elon Musk has warned that one other rate of interest hike by the U.S. Federal Reserve may lead to deflation hitting the economic system.
A significant Fed price hike dangers deflation
— Elon Musk (@elonmusk) September 9, 2022
Final yr, Musk predicted that the U.S. would enter a recession.
If historical past is any information, not many will make it previous the subsequent recession
— Elon Musk (@elonmusk) December 30, 2021
On Friday, Federal Reserve Governor Christopher Waller warned that he expects a “vital” rate of interest improve later this month.
He talked about that policymakers ought to cease guessing the long run and as a substitute stick with what the info is saying.
Waller later added that he expects rate of interest will increase to proceed till at the least “early subsequent yr” because the central financial institution works to get inflation nearer to its 2% purpose.
Nonetheless, he mentioned that the Fed’s “coverage path” would rely on the upcoming financial knowledge. He hinted that he would help the 0.75-point transfer as a substitute of a half-point improve.
Final week, Federal Reserve Chair Jerome Powell mentioned policymakers will stay “strongly dedicated” to driving costs right down to the two% goal “till the job is completed.”
Additionally Learn: Will Tesla EV Costs Rise With Raging Inflation? What Elon Musk Has To Say
Responding to Musk’s tweet on deflation, Dogecoin DOGE/USD co-creator Billy Markus, who goes by the username Shibetoshi Nakamoto, shared a meme exhibiting how Bitcoin BTC/USD maxis really feel about potential deflation.
bitcoin maxis be like pic.twitter.com/fRyMMPsQdB
— Shibetoshi Nakamoto (@BillyM2k) September 9, 2022
Fund supervisor Cathie Wooden has mentioned that the Fed ought to stop elevating rates of interest, that the economic system is now seeing deflation somewhat than inflation and is in recession.
“The Fed appears to answer covid-related provide shocks spanning 15 months the identical approach that former Fed Chairman Paul Volcker battled inflation that had been brewing and constructing for 15 years,” the chief govt of Ark Funding Administration tweeted.
The Fed is basing financial coverage selections on lagging indicators: employment and core inflation. Main inflation indicators like gold and copper are flagging the chance of deflation. Even the oil value has dropped greater than 35% from its peak, erasing many of the achieve this yr. https://t.co/e45KJWrjOZ
— Cathie Wooden (@CathieDWood) September 7, 2022
Picture: Created with a picture from Steve Jurvetson on Flickr
