That US Federal Open Market Committee A two-day monetary policy meeting begins on Tuesday. Before, Tesla Inc. TSLA chairman Elon Musk took to Twitter to comment on inflation and interest rates.
What happened: Cathie Wood of Ark Invest tweeted last week that the Biden administration is sticking to what was prevalent in the 1970s – when the Fed went under Larry Summers started a relentless fight against inflation by raising the key interest rate. Inflation then raged unchecked for 15 years before the Fed took action, she said.
Wood warned of looming deflation by pointing to sharp price declines across various items from pre-COVID levels.
Musk’s answers: In response to the Treasury Manager, Musk tweeted, “Yes, the fundamental flaw lies in analogy rather than fundamental principles.”
Yes, the fundamental flaw is analogy rather than rationale
— Elon Musk (@elonmusk) September 19, 2022
One of Musk’s supporters intervened Sharing a graph of past inflation trends and suggested that the current scenario is more like that of 1949, when inflation rose to 10%, only to quickly fall back to -2.5% within 12 months.
“If [Federal Reserve] waits a month or pivots, does not matter. Deflation hits them on the chin because they’re using old data,” he said.
Musk tagged Twitter user Wood and the Federal Reserve, noting that the Fed’s decisions have been delayed for too long. “Problematic in a rapidly changing world,” he added.
See also: Technical analysis of Dow Jones before FOMC
Commentary on Musk’s View on the Economy and Monetary Policy, Crypto YouTubers Matt Wallace revived calls for Musk to be president. “Elon Musk for President,” he tweeted.
Elon Musk as President
— Matt Wallace (@MattWallace888) September 19, 2022
future fund Gary Black echoed a sentiment similar to that of Musk and Wood. “The Fed is on the wrong track in aggressively raising rates to combat Covid-induced supply-side inflation that has already peaked,” he said.
