“Shark Tank” star Kevin O’Leary warns that higher interest rates will cause “real chaos” for the US economy

Shark Tank investor Kevin O’Leary exposed the cold, hard truth about America’s housing market on Tuesday, warning that September would be the start of “real chaos” for the US economy.

Experts warn that mortgage rates in the US will create a “dangerous” situation for the real estate market

“This was inevitable. We talked about it six weeks ago and now you’re just starting to see the chips start to come down. The layers are as follows: (The) regional banks don’t know yet what their capital requirements are,” he explained during an appearance on Facebook. Kudlow: “So, their loan books closed like a turtle in a shell.”

“It gets worse before it gets better,” he warned on Tuesday. “What does it do to small businesses? It’s killing them now.”

Kevin O'Leary Mortgage

Millionaire Kevin O’Leary joins Kudlow to discuss his outlook on the US housing market and economy. (Getty Images/Getty Images)

The Fed’s aggressive rate hike campaign sent mortgage rates up rise above 7% For the first time in nearly two decades, the hot post-coronavirus housing market has cooled.

Interest rates have been slow to ease, hitting a two-decade high last week. Freddie Mac reports that interest rates on the 30-year fixed mortgage are hovering around 7.09%, well above the 5.13% rate recorded a year ago and the pre-pandemic average of 3.9%.

One year later, Senate Republicans gave the Inflation Reduction Act an “F”: “reckless spending spree.”

In addition, the Fed agreed to raise interest rates again in July, setting the key federal funds rate to the highest level since 2001.

O’Leary believes that the turbulent banking market in the US will cause “real chaos in a very short period of time”, highlighting the devastating impact that some of the short-sighted economic policies pursued by Congress have had on the average American.

“What I expect to happen here, while we still have full employment which is great, and if you don’t put any capital into the small business sector, which is 60% of jobs in America, it will start and we’ll see some real chaos in September, October and November. This is a congressional issue, Larry. It’s very simple.”

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“They gave all their money to the S&P 500 in two laws, the Chip and Science Act and the other, the Inflation Act. Not a dime for small businesses. A trillion for the big boys, nothing for the little ones. And the little ones are running America, so it must be rebalanced in Somewhere, Larry.”

Joe Biden Wisconsin Bidennomics

Biden speaks about his “economy economy” economic plan on the one-year anniversary of the 2022 Inflation Reduction Act. (Photo by Scott Olson/Getty Images) (Biden speaks to guests at Ingeteam Inc./ Getty Images)

O’Leary shifted his economic forecasts to China’s “dovish” economic policy, predicting that the country’s recent shift in strategy could be “bad” for big tech stocks.

“A lot of people, including Europeans, are starting to look elsewhere. And China is starting to realize that if we have to stay north of 4%, we have to be kinder to everyone around the world. That is my guess. They are O’Leary’s Larry Kudlow of FOX Business explained, “We’re not going to be hardcore. And I think you’ll see that the tone of conquering elsewhere in Asia recedes.”

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“It’s bad for technology. If we keep pressuring tech companies to stop them from selling to them, you’re going to see some correction in private equity. I agree with you, Larry, but this is the time to bring them to the table and put pressure on them.” their heads and showed them the stick and they get a level playing field. I’d like to see that.”

Kristin Altus of Fox Business contributed to this report.

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