The US Federal Reserve (FED) dictates its hawkish, hard stance on the US monetary policy. It is said that the aggressive stance of the FED, which controls the market movement, may make the deflation warning of Elon Musk, who buys Dogecoin and BTC, possible. Here are the details…
Criticism of the Fed’s monetary policy intensifies
Tesla and SpaceX CEO Elon Musk, who came to the agenda with Dogecoin and Bitcoin investments in the past, gave a terrible warning to the FED. He stated that the Fed’s hawkish stance and another rate hike could lead to deflation. Cathie Woods of Ark Investments also believes deflation is likely because the Fed has crossed the line. Similarly, the World Bank warned that quantitative tightening from the Fed will lead to a recession in 2023. On the other hand, the United Nations states that a recession is imminent if central banks do not return from their hawkish stance.
However, Elon Musk believes that deflation is the more likely outcome. A recession is when a country’s total GDP shrinks in consecutive quarters. It is often accompanied by slow growth, low demand and rising unemployment. On the other hand, deflation refers to the fall in the prices of certain prices and services over a period of time. In a short time, deflation can help the economy due to low prices. However, over a long period of time, deflation can hurt borrowers and investors.
Kashkari does not believe inflation has peaked
Despite rising risks, the Fed is likely to maintain its hawkish stance. Kashkari notes that there is no evidence to believe that inflation has peaked. But Kashkari’s comments do not quite fit the market. Popular Twitter account Zero Hedge reveals that every major bank on Wall Street believes inflation has peaked.
KASHKARI: BUT WE ARE SEEING ALMOST NO EVIDENCE THAT INFLATION HAS PEAKED
Every bank on Wall Street: "inflation has peaked"
— zerohedge (@zerohedge) October 6, 2022
Elon Musk and DOGE plans
As we have reported as Kriptokoin.com, Elon Musk, who made comments about the economy, has recently come to the fore with his Twitter purchase. Musk, who previously announced that he has Dogecoin in his portfolio, is still interested in buying Twitter. According to reports, Musk’s legal team sent a letter to Twitter offering to buy the social networking giant for $54.20 per share. Musk is also working with Dogecoin developers to create a cheaper, greener and faster alternative to Bitcoin.
It’s unclear whether Musk will further hinder the Twitter acquisition deal. However, if the purchase is concluded, this is positive news for DOGE. Musk previously talked about integrating DOGE as a payment option on Twitter. He also suggested using the meme token to kick bots and scammers off the platform. DOGE is already used as a payment method for some of Tesla’s products.
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