- Elon Musk stated that the depositor flight resulted from the Fed’s foolish interest hikes.
- Consequently, investors shift money from low-interest savings accounts to high-interest money market accounts.
- Musk’s statement was in response to Powell’s assurance that the investors’ deposits were safe.
Elon Musk, the CEO and owner of the American social media platform Twitter, commented that the depositor flight is significantly driven by the investors’ tendency to shift money from low-interest savings accounts to high-interest money market accounts, worsened by the “foolish rate hike.”
A major driver of depositor flight is people moving money from low interest savings accounts to high interest money market (Treasury Bill) accounts.This foolish rate hike will worsen depositor flight.— Elon Musk (@elonmusk) March 22, 2023
On March 23, the Twitter CEO shared a thread showcasing that the foolish interest hikes by the Federal Reserve would “worsen depositor flight.”
Interestingly, Musk’s tweet was in response to a post shared by the founder of the cryptocurrency Dogecoin Shibetoshi Nakamoto. The Dogecoin founder commented that “there’s literally only one bank and it has infinite money so everything is cool”, which was, in turn, a response to the Fed Chair’s notion on the banking system.
Previously, on Wednesday, Federal Reserve Board Chair Jerome Powell, in a conference, asserted that, following the collapse of the financial domains, the Fed has taken “powerful actions with Treasury and the FDIC, which demonstrate that all depositors’ savings are safe.”
Powell quoted:
The banking system is safe. Deposit flows in the banking system have stabilized over the last week.
Subsequent to Powell’s salient remark, various people popped up with consequential feedback. While WatcherGuru restated Powell’s comment, many tweeters, including Shibetoshi Nakamoto, reacted.
Notably, Musk has been raising his voice against the unjust interest hikes implemented by the Fed over a long period of time. On March 21, he asserted the urgency of the situation, reiterating the need to cut down the interest by at least 50bps.
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