Update: On Wednesday afternoon, the US Federal Open Market Committee decided to raise key interest rates to 4.75%-5%.
“The US banking system is sound and resilient. Recent developments are likely to lead to tighter credit conditions for households and businesses and weigh on economic activity, hiring and inflation,” the FOMC said. rack read. “The size of these effects is uncertain. The Committee remains very alert to inflation risks.”
Original story below.
On Wednesday, the US Federal Open Market Committee is expected to decide whether to raise or lower benchmark rates, something that has been much talked about amid several major bank failures in recent weeks.
Elon Musk took to Twitter to comment on that of billionaire hedge fund manager and investor Bill Ackman muses that the FOMC should consider a “temporary” pause in interest rates, citing “a number of major shocks to the system,” including the collapse of Silicon Valley Bank and the ailing sale of Credit Suisse to UBS.
“The effect of the above is a meaningful tightening of financial conditions not yet apparent in light of the rapidly unfolding events of the past two weeks,” Ackman wrote. “Inflation is still a problem and the Fed must continue to show determination.”
Musk joked back with a more extreme solution: cutting the base rate by 50 basis points.
The Fed must cut interest rates by at least 50 basis points on Wednesday
— Elon Musk (@elonmusk) March 21, 2023
Musk has spoken out about high and rising interest rates, and he sounded in January about the Fed’s decision to cut interest rates in 2009 after the 2008 financial crisis.
“The higher the rates, the harder the fall,” he said said bluntly.
In December, he accused the Federal Reserve of being the “real problem” behind Tesla’s falling market capitalization, something one of Musk’s followers found “completely unacceptable.”
Tesla is performing better than ever!
We have no control over the Federal Reserve.
That’s the real problem here.
— Elon Musk (@elonmusk) December 16, 2022
Federal Reserve Chairman Jerome Powell said so made it known that the committee’s long-standing plan has been to keep raising interest rates in the coming months.
The current benchmark the interest rate is set at 4.50% to 4.75% per last increase of the organization in February.
Wednesday’s decision is expected to be announced at 2 p.m. EST.