Elon Musk Evaluates the Recession Risk

The tightening policies of central banks, especially the Fed, brought the risk of recession to the agenda. While US President Joe Biden and US Treasury Secretary Janet Yellen declared that a recession was inevitable, Wall Street experts stated that the recession was preventable. Famous billionaire Elon Musk also made evaluations about the current economic indicators, thus the recession. Musk said that a recession could happen in the near term.

Elon Musk Evaluates the Recession Risk. Central banks, which tried to develop the economy with incentive packages during the Covid-19 pandemic, changed their policy in order to combat the increasing global inflation due to the Ukraine war after the pandemic. Under the leadership of the US Federal Reserve (Fed), the central banks of many countries have aggressively increased interest rates.

Emphasizing that the fight against inflation is the top priority, the Fed stated that it will continue its tightening policies for the 2 percent inflation target.

With the increase in interest rates, the risk of recession came to the fore. US President Joe Biden and US Treasury Secretary Janet Yellen stated that a recession is inevitable.

Elon Musk, who is frequently on the agenda with his statements on cryptocurrency markets, also expressed his views on the recession risk. Musk, CEO of Tesla and SpaceX, stated that central banks were hasty in withdrawing the incentives that came into effect during the pandemic period, and said he thought a recession was “more likely than not” to happen.

Speaking at an economic conference in Qatar and then speaking to Bloomberg, Musk stated that the recession could lead to a 10% reduction in the Tesla (TSLA) workforce (3% of the total workforce).

On the other hand, Musk gave the message that the company’s orders are full, and that the capacity is increased in Shanghai, Germany and Texas, and that the concerns about Tesla are unnecessary.

Elon Musk has acknowledged the rise of startups in China, such as Nio (NIO), Xpeng (XPEV), and BYD (BYDDY), noting that Tesla’s problem has never been competition. Musk said, “Our problems are more about raw materials and being able to increase production than competition.”

Donald Trump Question

On the other hand, Musk was asked if he would support Donald Trump if he ran for president again in 2024, referring to his previous statement.

Musk chose to abstain from answering this question, saying, “I haven’t decided anything about that choice at this point.”

On the other hand, Elon Musk said in a statement on his Twitter account, which has 99 million followers, that he tends to support Florida Governor Ron DeSantis.

Source: Investing.com