Tesla CEO and Twitter owner Elon Musk has a recession warning. In a tweet, Musk warned that if US Federal Reserve goes for a rate hike, it will further amplify recession. “If the Fed raises rates again next week, the recession will be greatly amplified,” wrote Musk. This is not the first time that Musk has warned against a Fed rate hike. Last month, Musk had said that the US economy was moving towards a severe recession, and that the Federal Reserve needs to stop increasing interest rates.
The US Federal Reserve has been hiking rates aggressively in 2022 in a bid to fight inflation and cool the labor market. As per Bloomberg, the consensus estimate among analysts is that next week’s data will show annual inflation rising at the slowest pace this year. The Fed has raised rates by 0.75 percentage points in each of its last four meetings.
What’s worrying markets and analysts
Wall Street ended lower on Friday December 9 as investors assessed economic data and await a potential 50-basis point interest rate hike by the Federal Reserve at its policy meeting scheduled for next week. The S&P 500 and Nasdaq Composite Index both shed 0.7 percent, while the Dow Jones Industrial Average fell 0.9 percent. Gold too edged higher as traders looked beyond mixed US economic data and awaited inflation data next week for clues on the pace of the Federal Reserve’s monetary tightening.
The US Fed is widely expected to slow the pace of rate hikes after central bankers gather next week. However, investors reportedly are worried that a strong jobs market and other data might convince the Fed to tighten monetary policy longer than hoped.
The next week is crucial for several countries in terms of rate hike. The European Central Bank and the Bank of England also have rate decisions due next week. Both the banks too have been hiking their rates sharply this year. Elsewhere, oil prices jumped by more than one percent as Russian President Vladimir Putin threatened to cut production after Western nations imposed a $60 price cap on Russian crude.
The US Federal Reserve has been hiking rates aggressively in 2022 in a bid to fight inflation and cool the labor market. As per Bloomberg, the consensus estimate among analysts is that next week’s data will show annual inflation rising at the slowest pace this year. The Fed has raised rates by 0.75 percentage points in each of its last four meetings.
What’s worrying markets and analysts
Wall Street ended lower on Friday December 9 as investors assessed economic data and await a potential 50-basis point interest rate hike by the Federal Reserve at its policy meeting scheduled for next week. The S&P 500 and Nasdaq Composite Index both shed 0.7 percent, while the Dow Jones Industrial Average fell 0.9 percent. Gold too edged higher as traders looked beyond mixed US economic data and awaited inflation data next week for clues on the pace of the Federal Reserve’s monetary tightening.
The US Fed is widely expected to slow the pace of rate hikes after central bankers gather next week. However, investors reportedly are worried that a strong jobs market and other data might convince the Fed to tighten monetary policy longer than hoped.
The next week is crucial for several countries in terms of rate hike. The European Central Bank and the Bank of England also have rate decisions due next week. Both the banks too have been hiking their rates sharply this year. Elsewhere, oil prices jumped by more than one percent as Russian President Vladimir Putin threatened to cut production after Western nations imposed a $60 price cap on Russian crude.
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