Kevin O’Leary Says ‘Nasty’ Inflation Is Not Going Down: Here’s When He Predicts the Next Rate Hike Will Be
Written by
Gabrielle Olya
Edited by
Chris Cluff
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Although inflation has been easing, it’s still taking a major hit on many Americans’ wallets.
“Inflation is not going down,” Kevin O’Leary said during a recent interview with FOX Business. “It’s north of [3%]. It hits you every day at the pump and it’s every day at the grocery store. It’s nasty.”
A ‘Downsized America’
The Fed has been on an aggressive rate-hike campaign to battle inflation, which has led to a “downsized America,” O’Leary said.
“People are looking at the cost of energy, car loans, mortgages,” O’Leary said. “Let’s talk about housing. Just three years ago, even 24 months ago, you [could] get a mortgage [with an interest rate of] 4.5%. You’re lucky to get one at 8% today. So that means the size of the house you’re going to buy is 20% to 25% smaller — that’s a downsize.”
Higher interest rates are also affecting the cars we buy.
“You want to borrow for a car? Sorry, that’s 8% to 9%,” O’Leary said. “It used to be 5%, so [now you’re buying a] smaller, less expensive car. And also, you really have to think about where you work. If you have to spend a lot of [time] driving, you’re going to pay a fortune on gasoline because that’s moving back up.”
The result of inflation is an overall downsized lifestyle.
“The truth is: If you take interest rates … from basically nothing to 5%, 5.5% now, and on its way likely to 6%, which means the lending rate’s more like 9%, it’s going to hurt somewhere,” O’Leary said. “That means your lifestyle … is going to be about 20% less.”
Don’t Expect Relief Any Time Soon
Experts are mixed on their predictions for how the Fed will deal with interest rates in the future, with some predicting that rate cuts are coming, and others predicting that the Fed will continue to raise interest rates to bring inflation down further.
O’Leary falls into the latter camp, saying, “The Fed may have to increase rates another 25 or 50 basis points as early as January [or] February.”
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