Billionaire Elon Musk said Sunday the Federal Reserve was “foolish” to not have cut interest rates sooner in the wake of a lackluster jobs report that raised concerns about an economic slowdown.
“The Fed needs to drop rates,” Musk wrote in a post on X, formerly Twitter. “They have been foolish not to have done so already.”
Musk’s comments come after the Federal Reserve held a policy meeting last week in which the central bank kept the target rate at a range of 5.25% to 5.5% – the highest level in 23 years that the Fed has held steady at since last July.
Policymakers said inflation remains “somewhat elevated” above its 2% target rate, with data for June showing inflation declined to 3%.
FED HOLDS INTEREST RATES STEADY AT 23-YEAR HIGH BUT OPENS DOOR TO REDUCING RATES
Fed Chair Jerome Powell signaled that an interest rate cut could occur at the central bank’s next meeting, although he said policymakers haven’t made a decision yet and will evaluate inflation and labor market data before they do so.
“The question will be whether the totality of the data, the evolving outlook and the balance of risks are consistent with rising confidence on inflation and maintaining a solid labor market,” Powell said. “If that test is met, a reduction in our policy rate could be on the table as soon as the next meeting in September.”
US JOB GROWTH SLOWS TO 114K IN JULY WHILE UNEMPLOYMENT UNEXPECTEDLY JUMPS
Musk made the comments in response to a post on X about billionaire investor Warren Buffett’s Berkshire Hathaway increasing its stockpile of cash equivalents and short-term treasuries after paring back its stock positions, including that of its largest holding, Apple.
“He is clearly expecting a correction of some kind or otherwise simply cannot see better investments than Treasury bills,” Musk said.
BUFFETT’S BERKSHIRE CUTS APPLE STAKE BY HALF, BOOSTS CASH STOCKPILE TO $277B AS IT GETS ‘DEFENSIVE’
On Friday, the Labor Department’s latest jobs report showed that the U.S. economy added 114,000 jobs, less than the 175,000 forecast by London Stock Exchange Group economists.
The slower-than-expected job growth contributed to an unexpected rise in the unemployment rate, which ticked up to 4.3% amid expectations it would remain at 4.1%.
FOX Business’ Megan Henney and Reuters contributed to this report.
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