Tesla co-founder and new Twitter CEO Elon Musk said that there was "probability of a severe recession" in 2023. In a reply to a tweet, Elon Musk said that the US Federal Bank needs to cut interest rates "immediately" to prevent a recession. According to Musk, increased interest rates by Fed are massively amplifying the "probability of a severe recession".
Elon Musk’s comments came in reply to a tweet that forecasted an economic recession in 2023. The tweet read, “I am expecting a real economic recession in 2023, be prepare for any macro storm ahead of us.”
In reply to it, Elon Musk tweeted, “Trend is concerning. Fed needs to cut interest rates immediately. They are massively amplifying the probability of a severe recession.”
Musk’s statement comes amid an economic meltdown owing to macroeconomic factors. After a $44-billion takeover in late October, Musk laid off nearly two-thirds of its nearly 7,500 employees across the globe. The recent firings have been a part of Musk’s plans to revamp Twitter, which he said was losing millions of dollars on a daily basis.
Most tech companies saw unprecedented growth in demand during the Covid-induced pandemic, which led to a massive hiring spree. However, as the world is slowly recovering from Covid and due to the added pressure owing to the Russia-Ukraine war, high inflation, declining consumer demands, and recession, the same companies are on a self-correction path.
On November 2, Federal Reserve officials delivered their fourth straight 75 basis-point interest rate increase. Fed Officials also signaled that their aggressive campaign to curb inflation could be approaching its final phase.