Tesla CEO believes the US Federal Reserve (Fed) was too slow to raise interest rates and could do the same when it cuts rates.
In an interview with CNBC on May 16, when asked how the Fed's policies would make this year difficult for Tesla, Musk replied that this could be a challenging year "for everyone, not just Tesla." He attributed the reason to the Fed's recent interest rate hikes to curb inflation.
The billionaire also expressed concern about the pace of the Fed's policymaking. "My concern is that the Fed is taking its time. The data is stale. They were slow to raise rates and may be slow to cut rates again," he said.
Tesla CEO Elon Musk in an interview with CNBC on May 16. Photo: CNBC
On May 3, the Fed raised its benchmark interest rate by 25 basis points (0.25%), to a range of 5-5.25%. This was the agency's 10th rate hike in just over a year. However, Fed officials also signaled that they may stop raising rates in the near future.
Musk’s comments on monetary policy are a reflection of how a major corporate leader views the rate hikes. As the head of Twitter, SpaceX, Tesla and other companies, Musk is seen as having a more holistic view of the economy . His comments are also a signal that companies selling high-end products could see demand decline in the coming months.
Tesla slashed prices earlier this year as competition and rising interest rates squeezed consumers' wallets. "You can think of the Fed raising interest rates as putting the brakes on the economy. It really does. It makes things more expensive. If you have to pay more every month on your mortgage, your car, you have less money left over to spend on other things," Musk said.
Ha Thu (according to CNBC)
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