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.

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€.

Bioterror Roundup: CDC Director Nominee Is a Monster + New mRNA Pregnancy Studies

Bioterror Propaganda Roundup: The latest updates on the โ€œnew...

The Sacred Honor of the 56

Today we're celebrating the sacred honor of the 56 men who signed the Declaration of Independence.

Alligator Alcatraz: A Bold Step Toward Secure Borders

Alligator Alcatraz funded through FEMA, represents a decisive move by the Trump admin to address illegal immigration with efficiency and resolve.

New White House Faith Office Aims to Ensure US Is Beacon of Freedom for Others

The White House Faith Office wants to see the United States as the leader in advancing religious freedom, its faith director Jennifer Korn said.

Federal Reserve Rates Are Too High, Says Former World Bank Chief

Rates should be between 0.25 and 1.75 percent rather...

Newly Naturalized Citizens Say What American Freedom Means to Them

Nearly 820,000 people pledged allegiance to the United States and became naturalized citizens in 2024.

Noem Waives Environmental Restrictions to Fast-Track Water Barriers in Rio Grande

DHS Sec Kristi Noem waived federal environmental laws to fast-track construction of 17 miles of waterborne barriers in the Rio Grande in South Texas.

US Keeps Pressure on Chinese Goods Amid Vietnam Trade Deal

Transshippingโ€”rerouting goods through a third country to disguise the origin of the productsโ€”is a focal point of trade negotiations with Asian markets.

White House Report Reveals Top Earners, Staffers Working for No Salary

The Trump admin released its yearly report that shows the salaries for White House staffers, also revealing officials who arenโ€™t accepting salaries at all.

Transportation Secretary Urges Governors to Remove Political Messages From Crosswalks, Intersections

Duffy sent letters to governors, mayor of D.C., and gov of Puerto Rico urging them to remove political messaging from intersections and crosswalks.

Bessent: US, India Near Agreement to Lower Tariffs

The United States and India are โ€œvery closeโ€ to a trade agreement, Treasury Secretary Scott Bessent said on Tuesday.
spot_img

Related Articles