Shark Tank’s Kevin O’Leary has blunt take on Fed, Trump dispute

The famous investor weighed in on the mounting conflict between the President and Fed Chairman Jerome Powell.

Apr 27, 2025 - 00:12

Shark Tank’s Kevin O’Leary has blunt take on Fed, Trump dispute

The Fed's got its hands full. The economy is slowing, unemployment is rising, and inflation is sticky. Given the Fed's dual mandate, the prospect of stubborn inflation amid a weakening jobs market is particularly problematic.

The Federal Reserve sets interest rates at levels that encourage low inflation and unemployment. However, those are often competing goals. Raising rates will slow inflation but cause job losses, while cutting interest rates will increase jobs but spark inflation.

That dynamic has put Fed chairman Jerome Powell in a difficult position, especially since April 2, when President Trump announced reciprocal tariffs on so-called Liberation Day.

The inflationary nature of tariffs makes the Fed's decision on rates more complicated. As a result, Powell moved from cutting rates last fall to waiting to see how everything shakes out before deciding what will happen to interest rates next.

The wait-and-see approach, however, has drawn the ire of President Trump, who sees lower rates as key to offsetting any economic slowdown caused by his tariff plans.

Trump publicly criticized Powell for hesitating to cut rates, even threatening to remove him from his role as Fed chairman. Meanwhile, Powell has dug in, reinforcing Fed independence and the importance of avoiding impulsive moves in order to get rate policy right.

The tit-for-tat caused stocks to tumble earlier this week, catching the eye of popular investors and Shark Tank favorite entrepreneur, Kevin O'Leary, prompting a blunt opinion on the matter.

Shark Tank's Kevin O'Leary has a blunt take on the dust-up between President Trump and Fed Chair Powell.
Image source: TheStreet

The economy is slowing, the Fed is hesitating, and tariffs are looming

An unhealthy economy is the worst thing for workers, businesses, and investors. When economic activity falls, people lose their jobs, companies go bankrupt, and shareholders' portfolio values drop.

Unfortunately, the risk of stagflation, or even a recession, has risen in 2025.

Past inflation continues to crimp budgets, causing consumers to retrench and shift spending from discretionary items to essentials. Layoffs have risen, with 497,000 job losses in the first quarter, the most in Q1 since 2009, according to Challenger, Gray, & Christmas, and consumer confidence has tumbled.

The latest ISM manufacturing data shows the industry is in contraction, falling below 50 to 49 in March. Similarly, the ISM Services PMI suggests two-thirds of our economy may be stalling, given that its reading fell to 50.8 in March 2025 from 53.5 in February.

After adjusting for gold imports and exports, the Atlanta Fed's GDPNow forecasting tool currently pegs first-quarter GDP at negative 0.4%, a big drop from the 3% levels seen last summer.

Kevin O'Leary delivers blunt message on Fed, Trump tussle

Trump ramped up his anti-Fed rhetoric last week, lambasting Powell for hesitating on monetary policy in the past and threatening his removal.

In response to a question on Powell's future, President Trump said, “If I want him out, he'll be out of there real fast, believe me."

Then, Trump called Powell “a major loser.”

“With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” said Trump on Truth Social.

The harsh words sent investors scrambling, worried that challenging Fed leadership could mean more stock market volatility, given that businesses and markets hate uncertainty.

"There's a lot of jawboning about the Fed, which is always an independent body," wrote Kevin O'Leary on X. "Every executive jawbones the Fed, trying to get them to lower rates when it's politically expedient. It never works. The market doesn't want that."

Instead of adding uncertainty, O'Leary laid out a plan to settle the markets, recommending the White House cut a trade deal with India that could serve "as the blueprint for future trade with the EU and others" and start "some dialogue with China. Even early signals would be better than silence."

As for the Fed, O'Leary offered up a hard-nosed recommendation:

"Stop trying to bully the Fed. Powell’s not going anywhere — and the market wants him to stay independent," concluded O'Leary.