Elon Musk has blamed the massive drop in Tesla stock this year on the Federal Reserve, arguing the US central bank’s interest-rate hikes have made the stock market less appealing to investors.
“Tesla is executing better than ever!” Musk tweeted on Friday, in response to a Tesla shareholder who blamed him for the roughly $600 billion decline in Tesla’s market capitalization this year.
“We don’t control the Federal Reserve,” the CEO of Tesla, SpaceX and Twitter added. “That is the real problem here.”
US inflation has surged to 40-year highs this year, spurring the Fed to hike interest rates from near zero in March to over 4% today in a bid to cool the economy and curb the pace of price increases. Higher rates encourage saving over spending and make borrowing more expensive — meaning they typically weigh on asset prices.