Elon Musk has warned that a recession in the US is “inevitable”.

File photo of Elon Musk, SpaceX founder and CEO of Tesla (Reuters/Ali Song)

Elon Musk, the world’s richest man, issued a warning on Tuesday about The possibility of the US economy entering a recession.

Speaking at the Qatar Economic Forum in Doha, The CEO of Tesla said that a recession in the US looks likely in the near future.

I think a recession is inevitable at some point. As for the presence of a recession in the short term, it is more likely than others. Musk said when asked by the editor-in-chief of a newspaper Bloomberg NewsJohn Micklethwaite.

His outlook is fueling fears of a sharp decline in the world’s largest economy as the US Federal Reserve raises interest rates to counter the fastest pace of inflation in decades. President Joe Biden stressed on Monday that a recession in the United States is not “inevitable.” After a conversation with former Treasury Secretary Larry Summers, who sees a high probability that he is fighting stagflation.

An economic adviser to President Biden announced on Tuesday that the United States government is concerned about a possible recession, but considered that the foundations of the economy are strong enough to face this danger. “Obviously a concern, but our economy remains strong”Cecilia Ross crossed over to the chain CNBC.

“If we look at the key components of GDP in the last quarter (when activity contracted), they were strong in terms of consumer spending,” he said. The job market is still strong. The consultant added that growth is continuing, with weakness in the first quarter due to lower exports.

FILE PHOTO: Cecilia Ross, chair of the White House Council of Economic Advisers (Reuters/Jonathan Ernst)
FILE PHOTO: Cecilia Ross, chair of the White House Council of Economic Advisers (Reuters/Jonathan Ernst)

US GDP contracted 1.5% in the first quarter in the annual measure, the most widely used in the country, which compares GDP to the previous quarter and according to conditions at the time of measurement, forecasts estimated growth in 12 months.

Compared to the first quarter of 2021, GDP recorded an expansion of 3.5%. Quarter after quarter, a contraction of 0.4% was observed between the first quarter of 2022 and the fourth quarter of 2021.

“I don’t think a recession is inevitable,” Treasury Secretary Janet Yellen told CNN this weekend ABC. Yellen admitted it The economy is expected to “slow”.

An economy is considered to be in recession when there are two consecutive quarters of contraction in GDP.

Successive increases in interest rates by the Federal Reserve make planning in the United States the hypothesis of a possible economic recession.

“We expect a slight recession in the coming months, with continued inflation that will force a more pronounced adjustment of monetary policy.”Gregory Dako, chief economist at EY-Parthenon, said in a note published Tuesday.

(With information from AFP and Bloomberg)

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