Tesla CEO and Twitter chief Elon Musk believes the Federal Reserve’s recent rate hikes “could go down in history as the most damaging of all time“. The billionaire urged the Fed to immediately cut interest rates, noting that the U.S. central bank is “massively amplifying the likelihood of a severe recession.”
Elon Musk on Fed rate hikes
Tesla, Spacex and Twitter boss Elon Musk warned Thursday of the harmful consequences of a rapid interest rate hike by the Federal Reserve.
The Fed has never raised rates faster
We are all test subjects in a massive economic experiment pic.twitter.com/n3Bz6VG1GE
– Genevieve Roch-Decter, CFA (@GRDecter) December 22, 2022
His warning was in response to a tweet from former investment manager Geneviève Roch-Decter stating that “the Fed has never raised rates faster” than this year. Musk wrote:
At the risk of being repetitive, these Fed rate hikes could go down in history as the most damaging of all time.
Roch-Decter also attached a chart to her tweet showing that the Fed has raised interest rates more sharply and quickly this year than at any other time in modern history.
Many people agreed with Musk. “I agree, Elon. The mortgage industry is taking a bloodbath. Good professionals like me (marketing) laid off. Applications are at an all time low. This is a disaster.“, wrote one Twitter user. Another described, “This is what happens when the government artificially injects $3.5 trillion into the US economy. The Fed makes up for it with damaging interest hikes…It’s going to get worse.“
Elon Musk also blamed the Federal Reserve for the loss of Tesla’s market value. Investment advisor Ross Gerber tweeted last week, “Elon has now wiped out $600 billion of Tesla’s wealth and still nothing from Tesla’s board“. This is totally unacceptable.” Elon Musk responded:
Tesla is executing better than ever. We don’t control the Federal Reserve. That’s the real problem here.
The billionaire has repeatedly warned about the risks of the Federal Reserve raising interest rates. Earlier this month, he warned that the recession would be greatly magnified if the Fed raised interest rates again. The central bank then raised rates by 50 basis points after four consecutive 75 basis point hikes.
Last month, Musk warned that the “trend is worrisome“, noting that the Fed “must cut interest rates immediately.“He added:”They massively amplify the probability of a severe recession.“The billionaire has also previously stated that he believes the recession will last until the spring of 2024.