Elon Musk joins Jeff Bezos in predicting recession

Tesla CEO forecasts coming recession would last until early 2024

Stock markets have been hammered by worries of an aggressive rate-rising cycle that could tip the US economy into a recession. AFP
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Tesla chief executive Elon Musk said on Friday he thinks a recession will last until the spring of 2024, echoing a prediction by former Amazon head Jeff Bezos that a recession is on the way.

“Just guessing, but probably until spring of '24,” Mr Musk said on Twitter after a user asked him how long the recession would last.

It was not clear if Mr Musk was talking about a global recession or expanding on a comment he made on Wednesday about “a recession of sorts” in China and Europe that was affecting demand for electric cars.

Shares of Tesla slid more than 6 per cent to a 16-month low a day after Mr Musk told analysts on a conference call that economic weakness in China and Europe was causing demand to be “a little harder than it otherwise would be”.

Mr Bezos tweeted earlier in the week that he also believes a recession is coming.

“Yep, the probabilities in this economy tell you to batten down the hatches,” he wrote

He shared his predictions as part of a quote tweet that featured a CNBC video clip, in which Goldman Sachs' David Solomon said “there's a good chance we could have a recession in the United States”.

Kristalina Georgieva, managing director of the International Monetary Fund, this month warned of rising recession risks as the lender downgraded its growth forecast for next year.

US stock indexes jumped on Friday after a Wall Street Journal report said the Federal Reserve is likely to debate on signalling plans for a smaller interest rate rise in December.

Stock markets have been hammered by worries of an aggressive rate-rising cycle that could tip the US economy into a recession, with the benchmark 10-year US Treasury yield hitting fresh 15-year highs earlier in the session.

Traders are still widely expecting a fourth 75-basis-point rise at the central bank's November meeting.

Reuters contributed reporting

Updated: October 21, 2022, 5:55 PM
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