Musk said that the US economy "may" have fallen into recession - a judgment contrary to the views of economists and available data, and warned enterprises to pay attention to costs and cash flow "When all this is over, prosperity will come again," Musk said. "I don't know. It may be a year or 12-18 months. It will be a little difficult."
Fears of recession have intensified recently as the Federal Reserve tightens monetary policy to help cool inflation, which has risen to near its hottest level since the early 1980s. However, according to Bloomberg's latest monthly survey of economists, the likelihood of a recession in the next year is currently 30%.
Although the US economy shrank by 1.4% year-on-year in the first quarter, this was mainly caused by a record trade deficit. Demand indicators such as consumer spending and enterprise equipment investment actually began to accelerate in early 2022. The Atlanta Fed's gdpnow forecast now shows GDP growth of 1.8% in the second quarter.
Musk hinted that the recession was not necessarily a bad thing, adding that he had experienced some recessions in listed companies.
"It's often the case that if prosperity lasts too long, there will be a problem of misallocation of capital - basically, money will be spread to fools," he said.
When asked about Jeff Bezos's recent comments on inflation, musk said that the rise in prices was entirely due to the printing of money. According to the Bloomberg billionaire index, musk and Bezos are the richest and second richest people in the world, respectively.
"The real reason for inflation is that the government has printed countless more funds," Musk said. "It's not super complicated."