Tesla Inc CEO Elon Musk expressed concern about the Federal Reserve’s interest rate hike, saying it could crush Share Market.
During Tesla’s fourth-quarter earnings call last week, Musk said he worries that if the Fed raises interest rates past 6%, rates will soon exceed the S&P 500’s average return. reports business Insider.
“I think the Fed needs to be very cautious about potentially having a Fed rate higher than 6%,” Bi told him during the earnings call.
“If the S&P 500 is volatile and bank interest rates are not, why don’t you essentially put your money in a T-bill or savings account instead of the S&P 500?” They said. “The Fed is at risk of crushing the value of all equities. Quite a serious risk.”
In a recent tweet, Musk said that with interest rates rising, the Fed is raising monthly payments for anything bought with the loan.
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After reducing interest rates to 0-0.25% in early 2020 following the outbreak of COVID-19, the central bank started hiking rates in March 2022.
The Fed rate currently stands at 4.25%-4.50% after a cumulative 425 basis-point hike.
Last week, Musk took to Twitter to remember Federal Reserve is lowering interest Rates since the Great Recession of 2007–09.
He explained how his flagship electric vehicle venture got timely help during those times.
Last year, Musk warned that another interest rate hike could be imminent by the Fed. As a result deflation affects the economy,
Bank of America This also warned of a possible recession in 2023,