Kevin O’Leary, a co-host of “Shark Tank” and known Trump supporter, has voiced strong opposition to President Donald Trump’s attempts to exert control over the Federal Reserve. O’Leary warns that such actions could lead to “hyperinflation,” drawing parallels to Venezuela’s economic turmoil. “The reason we don’t have hyperinflation like Venezuela is because we have a Federal Reserve,” O’Leary said in an interview with Fox Business on Thursday.
“If you allow the ‘el presidente’ to set interest rates, you end up with bread costing $1,000 more every day.”
Trump’s persistent demand for the Federal Reserve to lower interest rates escalated with the recent dismissal of Fed member Lisa Cook. Economists argue that an autonomous central bank is crucial for maintaining economic stability, and any political pressure could disrupt its ability to manage monetary policy effectively. Lisa Cook has taken legal action against Trump over her attempted removal, which the president justified by accusing her of mortgage fraud.
However, Cook has not been charged with any crime and claims the issues related to her mortgage documents are unfounded. Traditionally, the Fed only lowers interest rates during periods of severe economic stress. For example, during the height of the COVID-19 pandemic, Fed Chair Jerome Powell reduced rates to zero percent to stimulate the economy amidst high unemployment and a disrupted global supply chain.
Powell has indicated recently that another rate cut might be on the horizon due to a tougher labor market, but emphasized that any reduction would be minimal to prevent runaway inflation.
Kevin O’Leary’s inflation warning
He has pointed to widespread economic uncertainty rather than pressure from Trump as the basis for these decisions.
White House trade adviser Peter Navarro commented on the shifts in the board’s makeup amid calls for Fed Chair Jerome Powell’s resignation. “Powell should see the tea leaves here,” Navarro said during a Tuesday appearance on NewsNation’s “The Hill.” “He’s beginning, grudgingly, to come over to the idea that he shouldn’t be holding rates up because of tariffs.”
O’Leary has been relatively supportive of the president’s unprecedented trade policy, citing significant revenue gains for the country. However, he urged Trump to use extra funds to pay down the national debt instead of providing citizens with retail checks.
Treasury Secretary Scott Bessent mentioned earlier this month that the administration is looking to pay off outstanding debts. “I’ve been saying that tariff revenue could be $300 billion this year. I’m going to have to revise that up substantially,” Bessent said on CNBC.
“We’re going to bring down the deficit to GDP. We’ll start paying down the debt, and then that can be used as an offset to the American people.”
Trump’s interventions in the Fed’s operations continue to spark debates about the independence of the central bank and the potential consequences of politicizing monetary policy. Economists are warning that such efforts to meddle with the Federal Reserve are likely to raise prices further for working families.
