According to Elon Musk, the Federal Reserve needs to cut interest rates now because there is a risk of heading into a severe recession
Elon Musk clashes with the Fed
For the entrepreneur of Tesla, SpaceX and now also the new owner of Twitter, it is a decidedly challenging time for a variety of reasons, not only in taking care of his own companies but recently also because of fears of a recession just around the corner.
“The trend is worrying. The Fed needs to cut interest rates immediately. They are massively amplifying the likelihood of a major recession.”
With these words, Elon Musk in September warned Twitter’s new employees in his cover letter preparing them for major and decisive challenges.
The concept expressed to his employees went hand in hand with the thoughts of Cathie Wood of Ark Invest on the risk of deflation.
The labor market and less-than-tight inflation are keeping the US economic fabric afloat despite another rate hike in sight ranging from 50 to 75 basis points.
Musk’s fears are about a protracted though mild recession and he well remembers the days of suffering during the dot-com crash in 2008.
“We’re headed for, I think, a pretty serious recession. I expect the crisis to last for a year or two. Frankly, the economic picture ahead is dire, especially for a company like ours that is so dependent on advertising in a difficult economic climate.”
According to Wood, inflation is falling, and if the Fed continues its aggressive policy we can expect severe inflation.
Wharton’s Jeremy Siegel agrees with the cause and condemns such a strenuous fight against inflation that unity at the nonfarm labor report is still propping up the US economy.
Elon Musk recently renewed his concern about Fed policies advising caution in raising rates.
Not just the Fed
The visionary South African engineer also finds himself in the position of having to deal with Apple CEO Tim Cook in the wake of Apple’s recent business move.
Apple has almost totally blocked its own listings on the canary social, and this has reportedly prompted Musk’s reaction:
“Do you hate free speech in America?”
And tagging the CEO of the device company are just some of the countermoves by the new Twitter chief.
But Apple did not stop there and apparently wants to remove Musk’s social app from the Apple store, creating serious commercial damage for the company.
Other companies have dropped Twitter ad campaigns for a loss of around $2 billion. These include The Coca-Cola Company, Nestle, Hp, Dell, Volkswagen, Cnn, At&t, and Verizon.
Elon Musk presses on by tweeting a poll asking Apple what kind of censorship in history has ever netted long-term positive effects, provoking the phone company.
Billy Markus of Dogecoin and other followers have stood up in support of Elon Musk.
The clamor from Musk’s fan base is to create their own cell phone under the motto of:
“If we can go to mars, making a cell phone will be very easy!”
The likelihood that the trillionaire entrepreneur will set out to make an Elonophone is high given the character’s courage and know-how, but it will certainly take time, and Insiders say that in the short term Musk is on the phone with the Ads of the world’s largest companies to rake in firsthand advertising on his own social.
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