Elon Musk believes we should be worried about deflation even though prices have been growing at an unprecedented four-decade pace

In a tweet on Wednesday, Elon Musk suggested that the Federal Reserve stop fighting inflation and focus instead on deflation.

After declaring earlier this September that a Fed rate increase could lead to deflation, the Tesla CEO called for the central bank's interest rates to be cut by 25%. 

"Musk's 0.25% suggestion was made in response to tweets by Cathie Wood (CEO of Ark Invest).

Wood pointed out that the prices of key commodities such as lumber, oil and copper have fallen from their peak in early 2022 over the past few weeks.

Musk replied to Wood on Wednesday with another tweet, "Impending deflation is neither subtle nor hidden."

Musk's call is in stark contrast with the current economic environment. According to Tuesday's inflation data, prices rose 8.3% over the past year.

Although it shows a slight slowdown in annual inflation rates since July,

this rate is still among the fastest year-over-year paces since the 1980s and higher than the 8.1% expected by economists.