'Shark Tank' Fame Kevin O'Leary On Fed Rate Hikes Spurring Regional Bank Failures: 'Things Are Going To Break'

Renowned “Shark Tank” investor Kevin O’Leary has expressed concerns that the current cycle of U.S. Federal Reserve rate hikes could lead to an increase in regional U.S. bank failures, CNBC reports.

Fed’s Rate Hike Cycle: O’Leary, who heads his own early-stage venture capital firm, O’Leary Ventures, told CNBC, “You keep squeezing the toothpaste tube, you keep rolling it up, you keep raising rates, and you know things are going to break, you just don’t know when and where.”

He further predicted that the breakdown will occur in the regional banks, which support 60% of the economy.

See Also: Federal Reserve to Follow Through With 0.25% Rate Hike Wednesday, Likely Another Next Meeting, Says Former Atlanta Fed President

Future Predictions: O’Leary suggested that the terminal rate, where the Fed stops, could be between 6.25 and 6.50. This is higher than the Fed’s median end-2023 forecast for its funds rate, which stands at 5.6% as of the June meeting.

“We’ve started to see the cracks, the Titanic has not [sunk],” O’Leary added.

Read Next: Federal Reserve to Follow Through With 0.25% Rate Hike Wednesday, Likely Another Next Meeting, Says Former Atlanta Fed President

Image Via Shutterstock