- Elon Musk believes the U.S. will experience a mild recession that will last about 18 months.
- Fears of a recession have persisted for months amid record inflation.
- The U.S. government is trying to cool the economy by raising interest rates.
Elon Musk thinks the US is heading for a recession.
The world’s richest man delivers his assessment of the U.S. economy at Tesla Annual General Meeting Thursday.
“Making macroeconomic forecasts is a recipe for disaster, but my guess is that we’re past the peak of inflation and we’re going to be in a recession,” the businessman said. “I’m just guessing here, it’s all guesswork. But I’m guessing it’s a mild recession, I don’t know, 18 months or something like that.”
He said that because Tesla needs to order items months in advance, it has some idea of where prices are going over time. A bit of good news for consumers: Musk said Tesla is seeing a downward trend in prices, “which suggests we’re past the peak of inflation.”
He said he expected inflation to “fall rapidly”, although he acknowledged that could change.
For months, economists have sounded the alarm that the U.S. may be heading for a recession. Record inflation prompted the Federal Reserve to raise interest rates to cool the economy and slow spending. Stocks have tumbled this year after a long bull run, with companies from Coinbase to Tesla announcing massive layoffs to cut costs.
Musk said earlier this year that Tesla would consider cutting 10% of its white-collar workforce.Rival automaker Ford is preparing to cut About 8,000 jobsBloomberg reports.
Still, not all economists agree, and there are signs that the economy is relatively healthy. The group that announces when the U.S. will enter a recession — the National Bureau of Economic Research — has yet to make a call.