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Elon Musk has warned that another interest rate hike by the U.S. Federal Reserve could result in deflation hitting the economy.<\/p>\n
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A major Fed rate hike risks deflation<\/p>\n
\n\u2014 Elon Musk (@elonmusk) September 9, 2022<\/a><\/p><\/blockquote>\nLast year, Musk predicted that the U.S. would enter a recession.<\/p>\n
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If history is any guide, not many will make it past the next recession<\/p>\n
\n\u2014 Elon Musk (@elonmusk) December 30, 2021<\/a><\/p><\/blockquote>\nOn Friday, Federal Reserve Governor Christopher Waller<\/strong>\u00a0warned<\/a>\u00a0that he expects a “significant” interest rate increase later this month.<\/p>\n
He mentioned that policymakers should stop guessing the future and instead stick to what the data is saying.<\/p>\n
Waller later added that he expects interest rate increases to continue until at least “early next year” as the central bank works to get inflation closer to its 2% goal.<\/p>\n
However, he said that the Fed’s “policy path” would depend on the upcoming economic data. He hinted that he would support the 0.75-point move instead of a half-point increase.<\/p>\n
Last week, Federal Reserve Chair Jerome Powell<\/strong>\u00a0said<\/a>\u00a0policymakers will remain “strongly committed” to driving prices down to the 2% target “until the job is done.”\u00a0<\/p>\n
Also Read:\u00a0Will Tesla EV Prices Rise With Raging Inflation? What Elon Musk Has To Say<\/a><\/em><\/p>\n
Responding to Musk’s tweet on deflation, Dogecoin <\/strong>DOGE\/USD<\/span> co-creator\u00a0Billy Markus<\/strong>, who goes by the username\u00a0Shibetoshi Nakamoto,\u00a0<\/strong>shared a meme showing how\u00a0Bitcoin<\/strong> BTC\/USD<\/span> maxis feel about potential deflation.\u00a0<\/p>\n
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bitcoin maxis be like pic.twitter.com\/fRyMMPsQdB<\/a><\/p>\n
\n\u2014 Shibetoshi Nakamoto (@BillyM2k) September 9, 2022<\/a><\/p><\/blockquote>\nFund manager\u00a0Cathie<\/strong><\/a>\u00a0Wood\u00a0<\/strong><\/a>has said that the Fed should cease raising interest rates, that the economy is now seeing deflation rather than inflation and is in recession.<\/p>\n
“The Fed seems to respond to covid-related supply shocks spanning 15 months the same way that former Fed Chairman Paul Volcker<\/strong> battled inflation that had been brewing and building for 15 years,” the chief executive of Ark Investment Management tweeted.<\/p>\n
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The Fed is basing monetary policy decisions on lagging indicators: employment and core inflation. Leading inflation indicators like gold and copper are flagging the risk of deflation. Even the oil price has dropped more than 35% from its peak, erasing most of the gain this year. https:\/\/t.co\/e45KJWrjOZ<\/a><\/p>\n
\n\u2014 Cathie Wood (@CathieDWood) September 7, 2022<\/a><\/p><\/blockquote>\nPhoto: Created with an image from\u00a0<\/em>Steve Jurvetson<\/em><\/a>\u00a0on Flickr<\/em><\/p>\n<\/div>\n