“Shark Tank” star Kevin O’Leary has a grim outlook on the immediate future of the U.S. economy, particularly for how it will affect small businesses.
O’Leary spoke with FOX Business’ Larry Kudlow about the Federal Reserve’s interest rate hikes and the inevitable “chaos” that he believes will hit the job market and economy by the fall.
“You’re just starting to see the chips start to fall. The layering is as follows: The regional [banks] don’t know yet what their capital requirements are going to be,” O’Leary explained. “So, their loan books have closed like a turtle in a shell. This gets worse before it gets better. And what’s it doing to small business? Killing them right now.”
O’Leary argued that not enough money is being pumped into small businesses and blamed the most recent Fed hikes, including a benchmark raise of 0.25% last month.
The increase brought the Fed’s target rate range to 5.25%-5.5%., the highest percentage in 22 years.
“What I anticipate is going to happen here, while we still have full employment, which is remarkable, and you don’t put any capital into the small business sector, which is 60% of the jobs in America, you’re going to start to see some real chaos come September, October, November,” he continued, blaming congress for pumping money into the S&P 500 via the Chips and Science Act and the other, Inflation Reduction Act. “A trillion for the big boys, nothing for the small guys. And the small guys, they run America, so it has to be rebalanced somewhere.”
This is not the first time O’Leary has sounded off about interest rate hikes and the potential issues that they can cause for small businesses, many of which are a part of his business portfolio.
“We’ve got a real crisis coming here; there’s no cash for small businesses. And when the Fed raises rates another 50 basis points, that’s going to make it worse,” the investor said bluntly last month during an appearance on FOX’s The Big Money Show. “So no, I’m not happy.”
O’Leary’s estimated net worth as of Wednesday morning was $400 million.