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Elon Musk says it’s ‘obviously correct’ that Fed is tanking US economy


Billionaire Elon Musk backed a distinguished Wharton economist who accused the Federal Reserve and its chairman Jerome Powell of completely botching their response to the present economic slump.

Musk reacted to a fiery rant from Wharton professor Jeremy Siegel, who told CNBC’s “Halftime Report” on Friday that the Fed’s current policy path is “way too tight” and “makes absolutely no sense to me in any way.”

Siegel, who admitted he was “very upset” concerning the Fed’s handling of the situation, accused Powell and his colleagues of waiting far too long to hike rates of interest. Now, Siegel argued, the Fed is tanking the economy by being too aggressive with rate hikes despite signs inflation is already easing.

“It’s like a pendulum. They were way too easy, as I’ve told you and plenty of others, through 2020, 2021,” Siegel said. “And now, ‘Oh my God, we’re going to be real tough guys until we crush the economy.’ ‘Poor monetary policy’ could be an understatement.”

“Siegel is clearly correct,” Musk tweeted on Saturday in response to a clip of Siegel’s rant.

Siegel accused Powell of ignoring several economic indicators, including falling commodities prices, a slowdown within the US housing market and declines in money supply.

Musk is amongst many business leaders who’ve held a pessimistic view on the state of the US economy in recent months. In June, Musk teed up layoffs at Tesla while warning he had a “super bad feeling” concerning the economic outlook.

Jeremy Siegel ripped the Fed’s policy moves in a scathing rant.NBCU Photo Bank/NBCUniversal via

Earlier this month, Musk joined others in warning that the Fed risked causing “deflation,” or a dangerous collapse in prices, by mountain climbing rates too aggressively despite a slowing economy.

The stock market has plummeted deeper into bear territory since last week, when the Fed implemented a super-size rate of interest hike for the third straight month. Central bank officials indicated that further sizable increases are likely within the months ahead — an indication the Fed is maintaining a hawkish course to combat decades-high inflation.

That’s despite warnings from Siegel, Musk and others that the Fed could steer the economy right into a lengthy downturn. US GDP has already declined for 2 consecutive quarters — the widely held definition of a recession.

Jerome PowellFed Chair Jerome Powell indicated rate hikes will proceed.REUTERS

Last week, Powell reiterated that the Fed planned to boost its benchmark to a “restrictive level” and “keep it there for a while” until meaningful signs that inflation had receded.

Powell admitted the stance would likely lead to job losses and a significant correction within the US housing market.

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