Elon Musk Calls For A 0.25% Fed Funds Rate Cut A Day After Inflation Data Spooked Market

Tuesday’s inflation data triggered a steep sell-off in equities and other financial assets.

What Happened: Ahead of the August inflation report, Ark Invest founder Cathie Wood made an argument for an impending deflation through a series of tweets.

To prove her point, she listed a number of commodities whose prices had significantly decreased from their pre-COVID levels. Lumber prices were down 60%, copper by 35%, oil by 35%, iron ore by 60%, DRAM by 46%, corn by 17%, Baltic freight rates by 79%, gold by 17%, and silver by 39%, she noted.

Tesla Inc. TSLA CEO Elon Musk chimed in with his thoughts on Wood’s tweet. “Exactly, this is neither subtle nor secret,” Musk tweeted.

Exactly, this is neither subtle nor secret

— Elon Musk (@elonmusk) September 14, 2022

See also: Is Elon Musk No Longer On Twitter? No, Here's What Actually Happened

Musk even has a solution for the predicament. 

When asked what the Fed should be doing, he said that it should decrease the fed funds rate by 25 basis points.

Drop 0.25%

— Elon Musk (@elonmusk) September 14, 2022

Why It's Important: Musk’s statement comes a day after the U.S. released its consumer price inflation report for August, which showed a more-than-expected annual pace of 8.3%.

The views of Wood and Musk were echoed by Empire Financial Research’s Whitney Tilson.

“I'm surprised the number wasn't lower, as extensive data and anecdotes show that inflation is falling fast. It makes me suspect that there's a lag effect in the data the Bureau of Labor Statistics is collecting,” the analyst said in his daily newsletter.

Read next: Cathie Wood Says Fed Is 'Making A Mistake:' Expect To See Policy Pivot In 3-6 Months