Kevin O’Leary, a renowned investor from “Shark Tank”, recently shed light on the grim reality of the American housing market, cautioning that September marks the beginning of a tumultuous period for the U.S. economy.
“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. This is an issue for Congress, Larry. It’s very simple,” O’Leary elaborated during a segment on “Kudlow”.
They gave all their money to S&P 500 in two acts, the Chips and Science Act and the other, Inflation Reduction Act. Not a dime for small business. 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,” he alerted on Tuesday.
The Federal Reserve’s assertive campaign to increase interest rates resulted in mortgage rates surpassing 7% for the first time in almost 20 years, dampening the fervent housing market that emerged post-COVID.
Despite a gradual decrease in rates, they reached a new peak last week. Freddie Mac disclosed that the 30-year fixed mortgage rates are currently around 7.09%, significantly higher than the 5.13% recorded last year and the 3.9% average before the pandemic.
Moreover, the Federal Reserve sanctioned another rate increase in July, elevating the key federal funds rate to its highest since 2001.
O’Leary contends that the unstable banking sector in the U.S. will soon trigger “acute chaos,” highlighting the detrimental effects of some shortsighted economic policies enacted by Congress on the average citizen.