Elon Musk has warned that another rate hike by the US Federal Reserve could lead to deflation hitting the economy.

A larger Fed rate hike risks deflation

— Elon Musk (@elonmusk) September 9, 2022

Last year, Musk predicted that the US would enter a recession.

If history is any guide, not many will survive the next recession

— Elon Musk (@elonmusk) December 30, 2021

On Friday, Governor of the Federal Reserve Christopher Waller warned that he expects a “significant” rate hike this month.

He mentioned that policymakers should stop guessing the future and instead go with what the data says.

Waller later added that he expects rate hikes to continue until at least “early next year” as the central bank works to bring inflation closer to its 2% target.

However, he said the Fed’s “policy course” would depend on upcoming economic data. He indicated that he would support the 0.75-point move rather than a half-point raise.

Last week, Chairman of the Federal Reserve Jerome Powell said Policymakers will “press hard” to push prices towards the 2% target “until the job is done”.

Also read: Will Tesla EV prices soar with raging inflation? What Elon Musk has to say

In response to Musk’s deflation tweet, Dogecoins DOGE/USD co-creator Bill Markuswhich goes after the username Shibetoshi Nakamoto, shared a meme showing how Bitcoin BTC/USD Maxis consider possible deflation.

bitcoin maxis be like pic.twitter.com/fRyMMPsQdB

— Shibetoshi Nakamoto (@BillyM2k) September 9, 2022

fund manager Cathie wood has said the Fed should stop raising interest rates, that the economy is now experiencing deflation rather than inflation and is in recession.

“The Fed appears to be responding to Covid-related supply shocks spanning 15 months in the same way as the former Fed Chair Paul Volcker fighting the inflation that has been brewing and building for 15 years,” tweeted Ark Investment Management’s CEO.

The Fed establishes…