Elon Musk has raised alarms about the direction of the U.S. economy, predicting that unchecked government spending could lead to bankruptcy.
He took to X (formerly Twitter) to criticize the government’s financial policies, pointing to a projected $16 trillion addition to the national deficit by 2035. Musk argues that this level of overspending is a key driver of inflation and threatens the country’s economic stability.
His concerns come as new data from the Commerce Department shows that inflation remains stable, with the Personal Consumption Expenditures (PCE) index holding at 2.5% in July. Despite this, the nation’s debt has surged to $35.27 trillion, fueling ongoing worries about the long-term health of the economy.
Musk’s warning arrives at a time of uncertainty in global markets, particularly as the Federal Reserve weighs future interest rate cuts. While inflation appears under control for now, the growing national debt casts a shadow over any economic optimism.
Bitcoin, often seen as a hedge against inflation, briefly surged past $59,000 following the release of the PCE data, although concerns about debt soon cooled the rally. Some analysts believe that Bitcoin could gain more traction as a safe haven, especially if fears over inflation and fiscal policy persist.
Adding to the intrigue, Musk recently won a legal battle over allegations that he and Tesla manipulated the price of Dogecoin. A federal judge dismissed the case, citing insufficient evidence that Musk or Tesla engaged in fraudulent activities related to the cryptocurrency.
Coinbase CEO Brian Armstrong has spotlighted a significant acceleration in institutional crypto adoption, driven largely by the surging popularity of exchange-traded funds and increased use of Coinbase Prime among major corporations.
The latest market turbulence, fueled by geopolitical tensions and investor fear, offered a textbook case of how sentiment swings and whale behavior shape crypto price action.
Jefferies chief market strategist David Zervos believes an upcoming power shift at the Federal Reserve could benefit U.S. equity markets.
Anchorage Digital, a federally chartered crypto custody bank, is urging its institutional clients to move away from major stablecoins like USDC, Agora USD (AUSD), and Usual USD (USD0), recommending instead a shift to the Global Dollar (USDG) — a stablecoin issued by Paxos and backed by a consortium that includes Anchorage itself.