Elon Musk: Inflation has peaked and recession will be moderate

Elon Musk is optimistic about the economic situation of the United States for the coming months.

Billionaire Elon Musk made fresh comments about the struggles facing the world’s largest economy at Tesla’s latest shareholder meeting.

Faced with the highest inflation in 40 years, the Federal Reserve (FED) raised interest rates again, which caused sharp falls in the stock markets, also hurting the cryptocurrency market.

Uncertainty in the US economy

Add to this the uncertainties caused by the conflict between Russia and Ukraine and rising tensions with China, which lead many economists to believe that the United States will enter a major period of economic recession.

Musk himself has already warned about this, saying that a period of strong crisis could cause several bankruptcies and last until the end of 2023. However, the richest man in the world seems confident, thinking that the scenario might not end up being so bad.

Although he points out that “making macroeconomic forecasts is a recipe for disaster”, he predicts that the coming crisis will be “relatively mild”. One of the reasons for this would be the low debt of most companies:

“The leverage or debt that companies currently have is relatively low, so I would probably think of a mild to moderate recession, maybe 18 months or so.”

Elon Musk Doge

Inflation tends to fall

On inflation, the CEO of Tesla comments that he and his team have “a good view of how the prices of things change over time”.

Indeed, the car company has to manage various products and materials from different parts of the world to carry out its activities, according to the billionaire:

“We get a lot of information about how the prices of things change over time, because when you’re making millions of cars, you have to buy goods months before they’re needed. […] so we have an idea of ​​the price increase”.

The businessman also points out that the prices of several raw materials used by the company are already falling, a trend that is expected to continue over the next six months. Therefore, he expects inflation to “fall rapidly”.

For many analysts and major players, an improvement in the global economic scenario is crucial for the cryptocurrency market to re-enter a bull cycle and reach new all-time highs.

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