US Fed needs to cut interest rates immediately as recession looms: Musk

Elon Musk on Wednesday said the US Federal Reserve needs to immediately cut interest rates as a severe recession is looming, ahead of the speech by Fed Chair Jerome Powell at a US event on the outlook for the economy and the changing labour market.

Reacting to Vincent Yu, Founder of Tesmanian.com who said he is expecting a real economic recession in 2023, Musk replied: "Trend is concerning. The Fed needs to cut interest rates immediately. They are massively amplifying the probability of a severe recession".

Musk's comments came as Powell was set to speak at the Hutchins Center on Fiscal and Monetary Policy on the outlook for the economy and the changing labour market on Wednesday.

Stock market investors were keen to watch for any indications from Powell's speech, regarding the rate hike amid tough global macroeconomic conditions.

Ironically, earlier this month, Musk said that the US economy is inching towards a severe recession, and the Federal Reserve needs to stop hiking interest rates.

"We are headed into, I think, quite a serious recession," he told Twitter employees in a meeting.

"Frankly, the economic picture ahead is dire, especially for a company like ours that is so dependent on advertising in a challenging economic climate," he told them.

In September, he tweeted: "A major Fed rate hike risks deflation".

The Tesla CEO also said that the Fed is "looking in the rearview mirror" with its interest rate hikes.

--IANS

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