Elon Musk Wades Into Inflation Debate as Fed Tees Up Another Jumbo Rate Hike

Contact Your Elected Officials
The Epoch Times Header

Tech entrepreneur Elon Musk weighed in on the inflation debate as Federal Reserve policymakers prepared to convene for a two-day meeting at which markets expect the central bank to deliver another large rate hike to cool soaring prices.

Musk took to Twitter on Sept. 19 to argue that former Treasury Secretary Larry Summers had made a โ€œfundamental errorโ€ in viewing the current bout of inflation as similar to the 1970s and deeply entrenched.

โ€œYes, the fundamental error is reasoning by analogy, rather than first principles,โ€ Musk wrote in response to a message by Ark Invest CEO and CIO Cathie Wood, who argued that Summers โ€œseems to be leading the Biden administration astray with his conviction that inflation is intractable, with the 1970s as his guide.โ€

Wood added in a follow-on message that the current bout of inflation started with the pandemic and supply-chain dislocations, and was made worse by Russiaโ€™s invasion of Ukraine.

โ€œThe Fed is solving supply-chain issues by crushing demand and, in my view, unleashing deflation, setting it up for a major pivot,โ€ she argued, prompting Musk to respond with his concurrence.

Muskโ€™s remarks feed into the current debate around whether the Fed is hiking too much or too little, and whether more inflationโ€”or deflationโ€”is in the pipeline as the economy cools.

Inflation or Deflation?

Summers told Bloombergโ€™s โ€œWall Street Weekโ€ in a recent interview that the Fed acted too slowly on soaring inflation and that the central bank now needs to keep hiking aggressively to tamp down price pressures.

โ€œHistory records many, many instances when policy adjustments to inflation were excessively delayed and there were very substantial costs,โ€ Summers said, noting that the most significant example of such costs was during the long period of high inflation during the 1970s.

Summers added that he saw evidence that inflation had become entrenched. He pointed to core inflation rising more than 6 percent in August, as well as sharp wage boosts for job-switchers and rising input costs in the housing sector.

The Epoch Times
The Epoch Timeshttps://www.theepochtimes.com/
Tired of biased news? The Epoch Times is truthful, factual news that other media outlets don't report. No spin. No agenda. Just honest journalism like it used to be.

Was Texas Storm Manmade?

Another โ€œ1-in-100 yearsโ€ weather event in Kerr County happened next to a Texas designated โ€œWeather Modification Map of Rain-Enhancement Projects in Texasโ€.

The America Party Will Harm Democrats The Most

Elon Musk formed the America Party after an X poll asking his followers if they wanted โ€œindependence from the two-party system!

Democrats Exhibit the Dunning-Kruger Effect (DKE)

โ€œThe Dunning-Kruger effect is a cognitive bias where people with low ability at a task overestimate their competence, while those with high ability underestimate their competence.

250 Countdown

Those 56 intrepid men who signed put their very lives, honor and fortunes on the line. There was no auto-quill to accommodate their signatures.ย 

How the Senate Parliamentarian Changed the OBBB

An unelected bureaucrat does a important job in the U.S. Senate. Elizabeth MacDonough enforces senate rules on Trumpโ€™s โ€œOne Big Beautiful Billโ€.

Trial Begins Over Trump Adminโ€™s Deportations of Pro-Palestinian Students

A trial over President Trumpโ€™s attempts to deport pro-Palestinian activists began on July 7 with attorneys debating free speech.

Man Killed After Opening Fire at Border Patrol Facility in Texas

27-year-old man armed with a rifle was killed after opening fire outside Border Patrol facility in McAllen, TX, prompting shootout with feds and local police.

California Rejects Federal Push to End Transgender Participation in School Sports

CA education officials are refusing to end policies allowing transgender students to participate in school sports consistent with their gender identities.

Amazon Prime Day Set to Lift US Online Sales by $23.8 Billion

Online spending in the United States is expected to surge by $23.8 billion during Amazonโ€™s expanded Prime Day event from July 8 to July 11.

Trump to Extend Tariff Deadline to Aug. 1, Keep Rates at 10 Percent During Talks

White House press secretary Karoline Leavitt told reporters that Trump will sign the order to move the deadline to Aug. 1 from its current date of July 9.

DOJ, FBI Find Epstein Committed Suicide, Had No โ€˜Client Listโ€™

Jeffrey Epstein committed suicide and had no โ€œclient list,โ€ according to the Department of Justice (DOJ) and the FBI.

National Weather Service Fully Staffed During Deadly Texas Flooding: White House

White House press sec. Karoline Leavitt told reporters that the National Weather Service had a full staff on hand to handle the Central Texas flooding.

US Removes Terrorist Designation for Al Qaeda Affiliate in Syria

The State Department has removed from its list of foreign terrorist organizations Al Qaedaโ€™s affiliate in Syria, Jabhat al-Nusra.
spot_img

Related Articles