There is a chance of a worldwide recession, but only in the event of a serious geopolitical crisis.
Elon Musk, the billionaire owner of Tesla and SpaceX, indicated on the "Full Send" podcast this week that the US is not about to enter a "major recession," but a slight slowdown is probable.
"I don't believe a severe recession is imminent. Reiterating his earlier this week prediction at the Tesla 2022 shareholders' meeting that the US is "beyond peak inflation" and expected to experience a "pretty moderate recession" lasting for roughly 18 months, he said, "It might be a minor recession that lasts for a couple of years."
Musk said that a worldwide recession is also a possibility on the show. He remarked, about the conflict between China and Taiwan, which would depend on the geopolitical environment and may be set off by a significant geopolitical event.
"If there is a battle between China and Taiwan, that is the thing that is difficult to forecast. The result would be a global economic downturn. There may be a sizable event.
The US has experienced rapidly rising inflation and a decline in GDP since the start of the year. The US economy contracted by 1.6 percent in the first quarter of 2022 and by an additional 0.9 percent in the second. As of June, inflation had reached 40-year highs, standing at 9.1 percent year over year, forcing the US Federal Reserve to raise interest rates. At the same time, US stocks have been falling, and major corporations like Elon Musk's Tesla have been forced to announce sizable layoffs to organization reduce costs.
The National Bureau of Economic Research, the organization that determines when the US officially enters a recession, has not yet done so, even though many analysts have been predicting a recession. Others contend that the US economy still can survive.