- Elon Musk, CEO and founder of Tesla, said a recession is likely to occur in the near future.
- Musk commented on the Biden administration’s stance that a recession is “not inevitable.”
- Wall Street firms are also forecasting a greater chance of a recession in the next two years.
Billionaire Elon Musk said on Tuesday that a
is “inevitable” and would likely occur sooner rather than later.
Tesla’s CEO gave his comments at the Qatar Economic Forum, where he was questioned about his “super bad feeling” about the economy and what he thought of Biden’s government officials’ claims that a US recession is “not inevitable”.
“Well, I think a recession is inevitable at some point,” Musk replied. “Whether there’s a recession coming in the near term, I think it’s more likely than not.”
“It is certainly not a certainty,” he added.
Musk’s assessment comes as Wall Street has forecast a greater chance of an incoming recession, with Goldman Sachs saying on Tuesday the U.S. has a 30% chance of hitting such a slump in the coming year, up from the earlier forecast of 15%.
The company highlighted a 48% cumulative chance of a US recession in the next two years.
Meanwhile, Mike Wilson, Morgan Stanley’s chief US equity strategist, said the company’s economists estimate the probability of a recession in the coming year at 35%, up from 20%.
“Right now, a recession is no longer just a tail risk given the Fed’s predicament with inflation,” Wilson said in a note Tuesday.
Deutsche Bank also said on the same day that it is now forecasting an earlier recession than previously expected.
Musk has spoken out before about how the US is rapidly approaching a recession. In December, he said his “gut feeling” was that one would likely happen in the spring or summer of 2022, but no later than 2023.
“I’ve been through a few” [recessions]he said at a tech conference in May. “And what usually happens is that if you have a boom that’s too long, you get a misallocation of capital. It’s starting to rain money for fools, actually,” Musk added.
Meanwhile, in an interview with Associated Press last week, President Joe Biden emphasized that a recession is still avoidable, and urged Americans to maintain confidence.
“First of all, it’s not inevitable,” he told the AP. “Second, we are in a stronger position than any country in the world to overcome this inflation.”