Qatar Economic Forum: Musk, Roubini, Goldman warn of US recession risk

SpaceX boss says 'a few unresolved matters' remain on Twitter deal

elon musk
Elon Musk. (Photo: Bloomberg)
Bloomberg
2 min read Last Updated : Jun 22 2022 | 2:43 AM IST
Elon Musk, Nouriel Roubini and Goldman Sachs Group have warned of a growing likelihood that the US economy will fall into recession. Their outlooks will stoke fears of a hard landing for the world’s biggest economy as the Federal Reserve jacks up interest rates to counter the fastest pace of inflation in decades. 

Tesla Chief Executive Officer Musk said Tuesday that a recession in the US looks likely in the near future.

“A recession is inevitable at some point. As to whether there is a recession in the near term, that is more likely than not,” Musk said in an interview with Bloomberg News Editor-in-Chief John Micklethwait at the Qatar Economic Forum in Doha.  “It is not a certainty, but it appears more likely than not,” Musk said.

The SpaceX boss also said there were still a few “unresolved matters” about Twitter, and he was still waiting for a resolution on the matter of how many bots are on the social media platform. “There is the question of, will the debt portion of the round come together and then will the shareholders vote in favour,” Musk added.

Monday also saw Goldman Sachs economists cut their US growth forecasts and warn in a research note that the risk of recession was rising. 

The Goldman team sees a 30 per cent probability of entering a recession over the next year, up from 15 per cent previously, and a 25 per cent conditional probability of entering a recession in the second year if one is avoided in the first. That implies a 48 per cent cumulative probability in the next two years versus 35 per cent previously.

“We now see recession risk as higher and more front-loaded,” economists led by Jan Hatzius wrote. “The main reasons are that our baseline growth path is now lower and that we are increasingly concerned that the Fed will feel compelled to respond forcefully to high headline inflation and consumer inflation expectations if energy prices rise further, even if activity slows sharply.”

In his outlook, Roubini said he expects a US recession by the end of the year. Measures of consumer confidence, retail sales, manufacturing activity and housing are all slowing sharply while inflation is high, the chief executive officer of Roubini Macro Associates said on Bloomberg Television. “We’re getting very close,” he said.

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Topics :Elon MuskUnited StatesUS economyGoldman Sachs GroupTwitter

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