Update: On Wednesday afternoon the US Federal Open Market Committee decided to lift base interest rates to 4.75%-5%.
“The US banking system is healthy and resilient. Recent developments are more likely to result in tighter credit conditions for households and businesses, and have an effect on economic activity, employment and inflation.” – FOMC statement To read. “The extent of those effects is uncertain. The Committee stays very vigilant to the risk of inflation.”
Original story below.
The US Federal Open Market Committee is predicted to come to a decision on Wednesday whether to lift or lower its benchmark interest rate, which has been widely discussed following several major bank failures in the past few weeks.
Elon Musk took to Twitter to comment on billionaire hedge fund manager and investor Bill Ackman thinks about it The FOMC should consider a “temporary” interest rate hold, citing “quite a lot of major shocks to the system”, including the collapse of Silicon Valley Bank and the difficult sale of Credit Suisse UBS.
“The results of the above is a major tightening of monetary conditions that has not yet been apparent in light of the rapidly unfolding events of the past two weeks,” Ackman wrote. “Inflation continues to be an issue and the Fed must proceed to indicate determination.”
Musk responded with a more extreme solution – cutting the prime interest rate by 50 basis points.
The Fed must cut rates by no less than 50bp on Wednesday
— Elon Musk (@elonmusk) March 21, 2023
Musk has been vocal about high and rising interest rates, speaking in January about the Fed’s decision to chop interest rates in 2009 after the 2008 financial crisis.
“The upper the stakes, the harder the fall,” he said he said bluntly.
In December, he accused the Federal Reserve of being the “real problem” behind Tesla’s falling market capitalization, which one Musk supporter found “totally unacceptable.”
Tesla works higher than ever!
We do not control the Federal Reserve.
That is the real problem here.
— Elon Musk (@elonmusk) December 16, 2022
Federal Reserve Chairman Jerome Powell let me know that the commission’s long-term plan was to lift interest rates further in the coming months.
The current reference point the interest rate was set at 4.50% to 4.75% after the organization last raised in February.
Wednesday’s decision is predicted to be announced by 2 p.m. EST.