One of America’s leading entrepreneurs has warned that the US economy will “get worse before it gets better” in the wake of constant interest rate rises.
Kevin O’Leary is one of the businesspeople who features on Shark Tank, the sister show to Dragon’s Den in the UK.
He made the comments earlier this week in response to comments made by the US Central Bank’s chair Jerome Powell who suggested further rate hikes may be necessary.
Interest rates have been raised to 5.5 percent by the Federal Reserve to mitigate the impact of inflation on the country’s economy.
Due to the central bank’s decision, the average rate of a 30-year mortgage is sitting at 7.09 percent which is the highest in 22 years.
Speaking to Fox News’s Larry Kudlow, the 69-year-old voiced his concerns about the state of the US economy.
The Shark Tank star explained: “’This gets worse before it gets better. And what’s it doing to small business? Killing them right now.
“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 percent of the jobs in America, you’re going to start to see some real chaos come September, October, November.
“This is an issue for Congress, Larry. It’s very simple.”
As well as this, Mr O’Leary slammed the spending of the Biden Administration and the perceived lack of support for small businesses following the pandemic.
Notably, he took aim at the Chips and Science Act and the Inflation Reduction Act which are both pieces of legislation touted as part of the “Bidenomics” model.
Mr O’Leary added: “’Not a dime for small businesses. 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, Larry.”
Despite warnings over a pending recession in the US after the Fed’s interest rate hikes, the US economy has proven to be resilient.
As it stands, unemployment in the country is at one of its lowest levels in 60 years and is at 3.5 percent.
Furthermore, the Consumer Price Index (CPI) rate of inflation for the 12 months to July 2023 eased to 3.2 percent.
Even with these signs of improvement, the Fed has promised to continue to raise interest rates until inflation reaches its desired two percent target.
