Elon Musk: The US Fed Is Turning Inflation Into Deflation

Tesla and SpaceX CEO Elon Musk tweeted Friday night that a major interest rate hike by the US Federal Reserve (Fed) risks causing deflation in the US economy. His tweet attracted a lot of attention.

At the time of writing, the tweet has received over 80,000 likes and has been retweeted nearly 6,000 times.

The comment section was quite crowded with some agreeing with the Tesla CEO while others asserted that he had misjudged the US economy. Real Vision CEO and crypto investor Raoul Pal agreed with Musk:

Northmantrader founder and leading market strategist, Sven Henrich emphasized that it is dangerous for the Fed to be tightening the economy. Bitcoin skeptic Peter Schiff offered a different perspective, responding to Musk:

Politicians also joined the discussion. Representative Nancy Mace (R-SC) objected:

“If Biden and Pelosi hadn’t spent trillions of dollars we don’t have, we wouldn’t be having this conversation…”

Musk’s tweet followed an analysis by Ark Invest CEO Cathie Wood who warned about deflation on Wednesday.

In August, Musk said inflation had peaked and “will fall rapidly”. He also predicts that the US will probably experience a recession lasting about 18 months.

The market in general and the cryptocurrency market, in particular, are waiting for the next FOMC meeting this month, the Fed policy is likely to affect the economy in the short and medium term. At the time of writing, BTC is trading at $22,000.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

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