July 1, 2022

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Elon Musk warns that US is already in recession: is he right?

Many analysts and economists have shed light on the economic situation in the United States (US) in recent weeks. Now Tesla boss Elon Musk shares his analysis. According to him, we are already in a recession and it will only get worse.

There is a lot of uncertainty in the financial markets. By War in UkraineProblems in supply chains and recent interest rate hikes Federal Reserve Many analysts are concerned about the state of the economy. Comments more than once “Recession” And “Stagnation” Took in the mouth.

Musk warns that the recession will get worse

Musk recently shared his analysis. During an all-in summit in Miami on Sunday, he said the United States was already in a recession. “That recession will get worse. These things will pass and there will be a boom again,” it said. He warned that the economic downturn could lead to a misallocation of capital. According to him, companies need to make sure they have enough reserves.

Officially, there are no signs of a recession in the United States yet. Such an economic downturn will not be talked about until the volume of gross domestic product (GDP) continues to shrink for two quarters.

Economic contraction in the first quarter

The U.S. economy contracted in the first quarter 1.4 percentபொருளாதார Many economists estimate that the U.S. economy is likely to shrink in the second quarter. The recession in the last quarter was actually the result of low reserves and a sharp decline in exports. Domestic consumption stalled despite high inflation.

James Knightley, an economist at ING, noted that US consumer spending rose 2.7 percent after the growth figures were announced, which he believes is an important measure. He expects economic growth to pick up in the second quarter.

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Marco Kolonovic, a strategist at US bank JPMorgan, said earlier this week (stock) markets could increase the likelihood of a recession. Too much ratingபங்க “Shares can recover strongly if that recession does not occur. This seems like a real possibility, as corporate earnings continue to grow and appear healthy in the first quarter.

“A smooth landing”

Federal Reserve Chairman Jerome Powell expects the US economy to “more or less slow down than a hard recession.”

There are many credible avenues for a ‘smooth’ landing, “Powell said during a panel discussion hosted by the American Business Newspaper. The Wall Street Journalமூலம் By the word “gentle”, which often means a harder landing than those experienced by air travelers, Powell immediately corrected that belief. He acknowledged that there was “some pain” for Americans when the central bank took decisive action to reduce inflation.

(jvdh)