Elon Musk has called on the Federal Reserve to cut interest rates as soon as possible, warning its aggressive hikes this year have dramatically increased the risk of a deep economic downturn in the US.

"Trend is concerning," the Tesla, SpaceX, and Twitter CEO replied on Wednesday to another Twitter user's prediction of a recession next year.

"Fed needs to cut interest rates immediately," Musk continued. "They are massively amplifying the probability of a severe recession."

Inflation has skyrocketed to 40-year highs this year, prompting the Fed to hike rates from almost zero in March to around 4% today, and signal rates could peak above 5% next year. Higher interest rates discourage spending, borrowing, and hiring, which increase upward pressure on prices but can also sap growth and increase unemployment.

Musk has previously warned the US economy is set to shrink. "There's going to be probably a year or two of serious recession," he said during his first meeting with Twitter employees earlier this month.

He described the economic backdrop as "dire," and said Twitter faces a "challenging economic climate," in an email to Twitter staff.

"The Fed is not listening, because they're looking at the rearview mirror instead of looking out the front windshield," he said, meaning that the central bank is too focused on lagging economic data instead of current conditions.

Musk is one of several corporate bosses to sound the recession alarm in recent weeks. Amazon founder Jeff Bezos, JPMorgan CEO Jamie Dimon, and Goldman Sachs CEO David Solomon have all issued grim economic outlooks.