Elon Musk predicts the US will have a 'mild recession' for 18 months

 Tesla owner and billionaire Elon Musk has predicted that the United States (US) will have a 'mild recession' for 18 months. He laid out his assessment of the US economy at Tesla's annual shareholder meeting on Thursday.

He reportedly said that the US is heading into a recession. During the meeting, he said, "I am just guessing here, this is total speculation. But I would guess it's a mild recession for 18 months or something like that." Musk further said that the prices Tesla is seeing are trending downward, which "suggests that we are past peak inflation."

For the past few months, experts claimed that the US could be headed toward a recession. Due to record inflation, large companies like Tesla announced large-scale layoffs to cut costs. The US Federal Reserve also raised interest rates to cool down the US economy.

US Federal Reserve officials also voiced their determination on Wednesday to rein in high inflation. Fed Chair Jerome Powell also said last week that the central bank may consider another rate hike at the September meeting. The US Federal Reserve System is the central banking system of the country.

Inflation in the US

Inflation increased to 10.3 percent last month, driven by higher prices for gasoline, food, and shelter. The Fed had to raise interest rates to tame inflation. The petrol prices in the US hit record highs in June, averaging above $5 per gallon.

Americans are concerned about their household finances because of inflation. America's economy runs on consumer spending. The Omicron variant of Covid-19 already affected the economy at the start of 2022. Russia-Ukraine also affected the global economy.

According to media reports, high inflation in the US is caused because of the soaring demand and a lack of supply caused by the global impact on trade.