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Elon Musk has a new arch-enemy: the Fed
  + stars: | 2022-10-21 | by ( Theron Mohamed | ) www.businessinsider.com   time to read: +4 min
Elon Musk blasted the Fed's rapid rate hikes after Tesla blamed a strong dollar for missing sales forecasts. A Fed reversal could boost Tesla's sales and profits, and lift the value of Musk's shares. "The Fed is raising rates more than they should," Musk said during the automaker's third-quarter earnings call on Wednesday. "The Fed is not listening, because they're looking at the rearview mirror instead of looking out the front windshield," Musk said on the call. Additionally, if the Fed start loosening its monetary policy, that type of economic stimulus would likely juice Tesla's vehicle sales.
Not even September's stubbornly high CPI report could change Jeremy Siegel's view that the Fed needs to stop hiking interest rates. "If the Fed waits for the core to get down to 2% year-over-year, it will drive the economy into a depression," Siegel warned. "If the Fed waits for the core [inflation] to get down to 2% year-over-year, it will drive the economy into a depression," Siegel told CNBC on Thursday. Housing, which is almost 50% of the core rate, is the most distorted of all," Siegel explained. Now they're over correcting with interest rate hikes as inflation is high, but is leading indicators show signs it is falling.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailJeremy Siegel: If the Fed waits for core inflation to hit 2%, it'll drive economy into depressionJeremy Siegel, professor at the Wharton School, joins 'Halftime Report' to discuss if today's CPI data vindicates those who believe inflation hasn't peaked, Siegel's thoughts around the housing market, and more.
It's been eight years since the last edition of "Stocks For the Long Run." I think the key takeaway here is that in the long run stocks do tend to overcome inflation. And secondly, as you point out, not only do stocks tend to overcome inflation in the long run, they completely overcome inflation. Remember that is 4% before inflation, take that and compare it with the long run real return on stocks, which is 6.7% after inflation. You should own your home… But don't forget the real estate market and all the commercial real estate.
The Fed is making the same exact mistake it made a year ago, and possibly the biggest mistake in its history. That's according to Jeremy Siegel, who criticized the Fed's inability to recognize inflation is coming easing. That's because, according to Siegel, inflation is starting to come down significantly and the Fed is still moving forward with its rate hikes. We see no need to raise interest rates in 2022.' Siegel expects the Fed to "eventually see the light" as none of their recent predictions are likely to come true.
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