Elon Musk said a recession is 'inevitable' and would likely take place sooner than later

Elon Musk made his comments about the economy while attending the Qatar Economic Forum.

Theo Wargo/WireImage

• Tesla CEO and founder Elon Musk said a recession is likely to occur sometime in the near future.
• Musk was commenting on the Biden administration's stance that a recession is "not inevitable."
• Wall Street firms have also forecast higher odds of a recession in the next two years.

Billionaire Elon Musk said on Tuesday that a recession is "inevitable" and would likely take place sooner than later.

The Tesla CEO gave his comments at the Qatar Economic Forum, where he was quizzed on his "super bad feeling" about the economy and what he thought of the claims made by Biden administration officials that a US recession is "not inevitable."

"Well, I think a recession is inevitable at some point," Musk replied. "As to whether there is a recession in the near term, I think that it's more likely than not."

"Certainly it's not a certainty," he added.

Musk's assessment comes as Wall Street has forecast higher odds of an incoming recession, with Goldman Sachs saying on Tuesday that the US faces a 30% chance of hitting such a slump over the next year, up from its previous forecast of 15%.

The company highlighted a cumulative 48% probability that a US recession would happen over the next two years.

Meanwhile, Morgan Stanley's chief US equity strategist, Mike Wilson, said the firm's economists have put the chance of a recession over the next year at 35%, up from 20%.

"At this point, a recession is no longer just a tail risk given the Fed's predicament with inflation," Wilson said in a note on Tuesday.

Deutsche Bank also said on the same day that it now predicts an earlier recession than it previously expected.

Musk has been vocal before about how the US is fast approaching a recession. In December, he said his "gut feel" was that one would likely happen in the spring or summer of 2022, but no later than 2023.

"I've been through a few [recessions]," he said at a tech conference in May. "And what tends to happen is if you have a boom that goes on too long, you get a misallocation of capital. It starts raining money on fools, basically," Musk added.

Meanwhile, President Joe Biden stressed in an Associated Press interview last week that a recession is still avoidable, and urged Americans to stay confident.

"First of all, it's not inevitable," he told the AP. "Secondly, we're in a stronger position than any nation in the world to overcome this inflation."

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