August 8, 2022

  • Elon Musk believes that the United States will suffer a mild recession lasting about 18 months.
  • Recession fears have been mounting for months amid record inflation.
  • The US government is trying to calm the economy by raising interest rates.

Elon Musk believes that the United States is heading into a recession.

The world’s richest man put his assessment of the US economy into Tesla’s Annual meeting of shareholders Thursday.

“Macroeconomic prognostication is a recipe for disaster, but I believe we are past the peak of inflation and we will face a recession,” the businessman said. “I’m just guessing here, that’s complete speculation. But I think it’s a mild recession, I don’t know, 18 months or something.”

He said that because Tesla needs to order goods several months in advance, it has insight into where prices are headed over time. One good news for consumers: Musk said Tesla’s prices are trending lower, which “indicates that we are past the peak of inflation.”

He said he expected inflation to fall quickly, although he acknowledged that the situation could change.

For months now, economists have sounded the alarm that the US could be headed into a recession. Record inflation prompted the Federal Reserve to raise interest rates in an attempt to cool the economy and slow spending. Stocks have fallen this year after a long bull market, and companies from Coinbase to Tesla have announced widespread layoffs to cut costs.

Musk said earlier this year that Tesla would be looking to cut 10% of its white-collar employees. Rival automaker Ford prepares to cut Nearly 8000 jobsreported Bloomberg.

However, not all economists agree with this, and there are signs that the economy is in relatively good health. The organization declaring the United States is entering a recession – the National Bureau of Economic Research – has not yet issued that call.

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