Inflation Has Now Peaked, and Recession Will be Mild

Elon Musk: Inflation Has Now Peaked, and Recession Will be Mild


Elon Musk thinks things are looking up. In a new meeting with Tesla shareholders, the billionaire was optimistic about the future of the US economy.

During Tesla’s latest shareholder meeting, the billionaire spoke out about the difficulties facing the world’s largest economy.

To deal with the highest inflation in 40 years, the Federal Reserve (FED) raised its interest rates. This has influenced many industries, including the crypto sphere. Added to this are the uncertainties caused by the conflict between Russia and Ukraine and the increase in tensions with China. This has led many economists to believe that the United States will enter a major period of economic recession.

Elon Musk Confident About the Future

Musk himself has already given a warning about what lies ahead. He stated that a period of strong crisis could cause several bankruptcies and extend until the end of 2023. However, the richest man in the world seems confident that the scenario will not be as bad as many project.

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Despite noting that “making macroeconomic forecasts is a recipe for disaster,” he predicts that the coming crisis will be “relatively mild.”

One reason for this would be the low debt of most companies. “The debt that companies have now is relatively low, so I would probably say, a mild to moderate recession, maybe 18 months or so.”

Inflation tends to fall

On inflation, the Tesla CEO commented that he and his team have “a good view of where the prices of things are going over time.” This is due to the fact that the automotive company needs to deal with various products and inputs from different parts of the world to carry out its activities.

“We get a lot of information about where the prices of things are going over time because when you make millions of cars, you have to buy goods many months ahead of when they are needed … Because it’s a long supply chain with a huge amount of inertia, so we have some sort of idea of where prices are heading over time. The interesting thing we’re seeing now is that most of our commodities, most of the things that go into a Tesla – not all, but more than half – prices are falling in six months, six months from now.”

Because the price of commodities used by the company are already falling, this is a trend that should continue for the next six months. Because of this, he projects that inflation will “fall rapidly.”

For many analysts, an improvement in the world economic scenario is crucial for the cryptocurrency market to re-enter a bullish cycle and reach new highs and records.

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