Inflation Won't Be Repaired By November Says Kevin O'Leary — 'It'll Be A Major Election Issue'

Canadian business owner and investor Kevin O’Leary, also known as Mr. Wonderful from his time on Shark Tank, recently shared his thoughts on a major issue: inflation. According to him, inflation is going to stick around for a while and will be a major topic in the upcoming elections.

O’Leary pointed out that both Trump and Biden claim credit for a strong economy. For Trump, things were great before COVID-19, and Biden says he’s done a good job recovering since then. 

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But for most Americans, the reality is that prices are high, and that’s what they care about. Food prices have jumped by about 32% since before the pandemic and haven’t gone down. Housing costs have also increased significantly, and energy prices are rising again. These are the things people spend money on every day, making them feel like the economy isn't doing well, explained O’Leary.

In another interview, O’Leary said, "Inflation is very sticky. Getting it down to 2% from just over 3% right now will not happen anytime soon. I am not planning on any FED cuts at all. You gotta remember, it was only a few months ago when we planned on seven FED rate cuts." He continues, "We got zero, and I don’t think we will get one this year. You just heard a cautionary FED say that as we speak."

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His view is that the government printed too much money during the pandemic: "This is free helicopter money close to $2 trillion being poured onto the economy," says O’Leary, "but unfortunately, the majority of this capital is going to the S&P 500 in one way or another and not supporting the five to 500 employee-sized companies."

Even though the stock market has been doing well, with the Nasdaq up 18% and the S&P 500 up 14.5% in the first half the year, most Americans don't base their financial well-being on it.

"Talking about the stock market during an election cycle hasn’t worked ever, but the reason that’s the case is if you look at job creation in America, 62% come from businesses with between five and 500 employees. That’s the essence of the American economy, that’s the American first or second generation family running a business," says O’Leary.

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He also talked about taxes, saying it's better to keep corporate tax rates stable to keep the U.S. competitive and encourage investments and job creation. He suggested that using domestic energy reserves could help reduce the national debt.

Regarding taxes, O’Leary defended the entrepreneurial spirit of the U.S. He argued against punishing successful entrepreneurs who reinvest their earnings into businesses. He warned that increasing capital gains taxes could drive entrepreneurs and foreign investors away, hurting the economy.

Inflation Shows Signs Of Easing

Inflation in the United States is finally showing signs of letting up. In June 2024, the annual inflation rate dropped to 3.0%, down from 3.3% in May. This steady decline from previous months is a positive sign, indicating that the high inflation rates of the past year are gradually easing up.

Key areas contributing to this decrease include food prices, which rose by a manageable 2.2% over the year. Housing costs, a significant driver of inflation, increased by 5.2% in June, slightly lower than in previous months. Additionally, used car prices dropped significantly, falling by 10.1% over the past year​.

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