· Warnings come as rising interest rates fuel hard landing fears
· Musk spoke with Bloomberg Editor-in-Chief John Micklethwait
Elon Musk speaks via video link during the Qatar Economic Forum in Doha, on June 21.
Photographer:
Christopher Pike/Bloomberg
By Enda Curran
June 21, 2022, 2:09 PM
GMT+7 Updated onJune 21, 2022, 3:07 PM GMT+7
Elon Musk, Nouriel Roubini and Goldman
Sachs Group Inc. have warned of a growing likelihood that the US economy will
fall into recession.
Their
outlooks will stoke fears of a hard landing for the world’s biggest economy as
the Federal Reserve jacks up interest rates to counter the fastest pace of
inflation in decades.
Tesla Inc. Chief
Executive Officer Musk said Tuesday that a recession in the US looks likely in
the near future.
“A
recession is inevitable at some point. As to whether there is a recession in
the near term, that is more likely than not,” Musk said in an interview with
Bloomberg News Editor-in-Chief John Micklethwait at the Qatar Economic Forum in
Doha.
“It is not a certainty, but it appears more likely than not,” Musk said.
MORE FROM ELON MUSK INTERVIEW:
|
Musk ‘Undecided’ on Whether He Will Back
Trump in 2024 Election |
|
Musk Says Supply Constraints Biggest Brake
on Tesla’s Growth |
|
Musk Says Shouldn’t Be Problems Balancing
China, Tesla, Twitter |
Goldman Sachs economists
cut their US growth forecasts and warned in a research note Monday that the
risk of recession is rising.
The Goldman
team sees a 30% probability of entering a recession over the next year, up from
15% previously, and a 25% conditional probability of entering a recession in
the second year if one is avoided in the first. That implies a 48% cumulative
probability in the next two years versus 35% previously.
“We now
see recession risk as higher and more front-loaded,” economists led by Jan
Hatzius wrote. “The main reasons are that our baseline growth path is now lower
and that we are increasingly concerned that the Fed will feel compelled to
respond forcefully to high headline inflation and consumer inflation
expectations if energy prices rise further, even if activity slows
sharply.”
|
MORE: |
|
Fed Hikes 75 Basis Points; Powell Says 75 or
50 Likely in July |
In his
outlook, Roubini said he expects a US recession by the end of the year.
Measures of consumer confidence, retail sales, manufacturing activity and
housing are all slowing sharply while inflation is high, the chief executive
officer of Roubini Macro Associates said on Bloomberg Television.
“We’re getting very close,” he said.
Seeking to quell a surge in
living costs, the Fed accelerated its monetary-tightening campaign last week
with its biggest interest-rate increase since
1994. That drove fresh losses on Wall Street and has increased the odds of a
recession, piling pressure on President Joe Biden.
Biden reiterated Monday
that a US recession isn’t “inevitable” following a conversation with former
Treasury Secretary Larry Summers, who sees a significant chance the country
will find itself battling stagflation.
Qatar’s
Ministry of Commerce and Industry, Qatar Investment Authority and Investment
Promotion Agency Qatar are the underwriters of the Qatar Economic Forum,
Powered by Bloomberg. Media City Qatar is the host organization.
No comments:
Post a Comment