Elon Musk weighs in on the Fed's monetary policy again: 'A bad Fed decision affects the lives of everyone'
Elon Musk has weighed in on the Fed, in a reminder of his worries its policy could crush stocks' value.
"A bad Fed decision affects the lives of everyone," he tweeted in a discussion about the next Fed vice chair.
The tech CEO has blamed aggressive interest-rate hikes for Tesla's stock tanking in 2022.
Elon Musk has weighed in on the Federal Reserve again, in a tweet sparking reminders of his worries the central bank could crush the value of the entire stock market.
The Tesla boss was responding to a tweet highlighting the White House's approach to diversity in its search for the Fed's next vice chair, to replace Lael Brainard.
"Maximum skill with monetary policy is extremely important in this role!" Musk tweeted Thursday.
"A bad Fed decision affects the lives of everyone."
The US central bank has raised its key interest rate from near zero to almost 5% in the past year, in a bid to cool inflation running at historic highs. That has made mortgages, car loans, and credit cards much more expensive for Americans.
But Musk — who is CEO of Twitter and SpaceX, as well as Tesla — has focused on the impact on stocks in speaking out about the risks in the Fed's monetary tightening. He warned in January that its aggressive rate hikes could crush the value of the entire stock market by discouraging investors from dipping into them.
The tech billionaire has even blamed the central bank's rate hikes for Tesla's gloomy performance in 2022, when the EV-maker's stock plunged 65%, erasing $600 billion in market value.
The Fed's rate hikes are seen as a drag on stocks, as parking money in a interest-bearing investment instead becomes more attractive. Stock prices also tend to fall when interest rates rise because the higher levels eat eat away at the future cash flows that form part of a company's valuation.
Musk's latest comment comes just after Fed minutes from its policymakers' last meeting showed the central bank is likely to continue increasing rates this year — dashing the hopes of stock investors banking on an easing in its policy.
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