Kevin O'Leary Issues Housing Market Warning
Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content.
Canadian business owner Kevin O'Leary believes the effects of tariffs on recent inflation data could hurt the already stalled U.S. housing market.
In an op-ed for the Daily Mail on Sunday, the Shark Tank investor warned that last week's "crushing" inflation readings could reduce the likelihood of the Federal Reserve cutting interest rates this year, keeping mortgage rates at elevated levels.
"In fact, I'm betting there won't be a rate cut at all in 2025," he wrote. "And that will keep the U.S. housing market in its current state of stagnation."
Why It Matters
Growing inventory and falling prices have weighed on the U.S. housing market this year. Mortgage rates—and by extension interest rates—have been cited as a key factor behind softer selling activity, deepening existing affordability challenges for buyers and cooling overall demand.
Kevin O'Leary arrives to speak before a Senate Committee on Aging and House Select Committee on the Chinese Communist Party joint hearing in Washington, D.C., on April 9.
Kevin O'Leary arrives to speak before a Senate Committee on Aging and House Select Committee on the Chinese Communist Party joint hearing in Washington, D.C., on April 9.What To Know
O'Leary cited last week's inflation readings as an early signal that "the costs of sky-high tariffs will be passed on to consumers."
Last Tuesday, the Bureau of Labor Statistics reported that the core inflation rate had climbed by 3.1 percent year over year in July. Two days later, the Producer Price Index—which tracks inflation at the wholesale level—showed a 0.9 percent monthly increase in July, compared to a flat reading the previous month and exceeding forecasts of a 0.2 percent gain.
"In the short-term, U.S. companies have been absorbing the impact of President Donald Trump's tariffs," O'Leary wrote. "But that wasn't going to happen forever."
While rising prices are unlikely to have a direct effect on home prices and the housing market, O'Leary said such shaky inflation readings made it "less likely that Federal Reserve Chairman Jerome Powell will lower interest rates at the Fed's next meeting in September."
The central bank has held off on rate cuts this year despite pressure from Trump, holding firmly in "wait and see" mode as it seeks greater clarity on the effects of tariffs on inflation and the health of the labor market.
While mortgage rates have been dipping despite the Fed's cautious stance, these remain tied to borrowing costs and are still at elevated levels, a fact that has dissuaded many homeowners from upgrading and buyers from entering the market.
Housing inventory in the U.S. continues to surge to new post-COVID highs in 2025, according to data from Realtor.com. The data platform Cotality recently found that this surplus of listings had pushed the majority of listed homes to below their original asking prices.
"Those dynamics grind the gears of the housing markets to a slow crawl and—excluding pockets of the country, like Miami or Dallas Fort-Worth—they won't change until the Fed lowers rates and banks follow suit," O'Leary said. Given this, he advised any prospective buyers to downsize their expectations—"accept that you'll have to buy a smaller house, likely 30 percent smaller"—and to avoid purchasing a home that takes up more than a third of their monthly paycheck.
What People Are Saying
Bill Adams, the chief economist at Comerica Bank, said in comments shared with Newsweek following Tuesday's inflation data: "The Fed will likely see the July [Consumer Prices Index] report as a pebble on the scales against a rate cut in September."
He added: "Tariffs have had limited effects on inflation so far. But since tariff rates are up one day, down the next, then up even more the day after, it is too early to say how large their effect on prices will ultimately be. Some businesses are probably holding off on price increases while they wait to see where tariff rates settle out. But nobody goes into business to lose money, and companies will eventually pass on price increases one way or another."
Kevin O'Leary, a Canadian business owner and Shark Tank investor, wrote in the Daily Mail: "There is one more thing you can do to help buy the home of your dreams: move. Housing markets remain competitive in low taxes states like Tennessee, North Dakota, South Dakota, Florida and Texas.
"And government can do something else to help—tax breaks. In Canada, retirees don't have to pay capital gains taxes when they sell their primary residences, which allows for generational transition of housing from seniors to young people who are just starting out."
What Happens Next
The Federal Reserve's next rates meeting is scheduled for mid-September. According to a majority of economists polled by Reuters, the central bank is expected to announce its first cut of the year and to lower the benchmark interest rate by 25 basis points.
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On Friday, the U.S. Food and Drug Administration granted accelerated approval for Wegovy to treat metabolic dysfunction-associated steatohepatitis, or MASH, making it the first GLP-1 class therapy cleared for the progressive liver condition that affects around 5% of adults in the United States. Read more here. Powell at Jackson Hole, Walmart earnings: What to watch this week The investing world is gearing up for Jerome Powell's comments at Jackson Hole — the most important Fed monetary policy speech of the year, says Yahoo Finance's Myles Udland. The Fed chair's appearance dominates the week's calendar for markets, which also brings a clutch of retail giant earnings. Myles reports: Read more here. The investing world is gearing up for Jerome Powell's comments at Jackson Hole — the most important Fed monetary policy speech of the year, says Yahoo Finance's Myles Udland. The Fed chair's appearance dominates the week's calendar for markets, which also brings a clutch of retail giant earnings. Myles reports: Read more here. Goldman team likely to stay in Trump's crosshairs President Trump has recently offered a few choice words on the work from Goldman Sachs' economics team, led by long-time economist Jan Hatzius. The team is unlikely to garner some praise from Trump today. Here's what Hatzius and his team served up in a new note on Monday morning: "After the recent downward revisions to payrolls, our estimate of trend job growth is now clearly below even that . And while the picture could change again for better or worse, future revisions to job growth are more likely to be because the birth-death model is likely a bit too generous, changes in trend payroll growth can initially be partially misattributed to changes in seasonal factors, revisions to the raw payrolls data tended to be negative in past slowdowns, data from ADP raise doubts about officially reported payroll growth in healthcare, and the household survey is now overstating immigration and employment gains. Like the slowdown in activity growth this year, the slowdown in job growth appears to have arisen from more than just the direct effects of trade and immigration policy changes. We are particularly worried that 'catch-up hiring' in a few industries now appears over and job growth outside those industries has fallen to around zero. And while job openings remain at a decent level, they started to decline again earlier this year." President Trump has recently offered a few choice words on the work from Goldman Sachs' economics team, led by long-time economist Jan Hatzius. The team is unlikely to garner some praise from Trump today. Here's what Hatzius and his team served up in a new note on Monday morning: "After the recent downward revisions to payrolls, our estimate of trend job growth is now clearly below even that . And while the picture could change again for better or worse, future revisions to job growth are more likely to be because the birth-death model is likely a bit too generous, changes in trend payroll growth can initially be partially misattributed to changes in seasonal factors, revisions to the raw payrolls data tended to be negative in past slowdowns, data from ADP raise doubts about officially reported payroll growth in healthcare, and the household survey is now overstating immigration and employment gains. Like the slowdown in activity growth this year, the slowdown in job growth appears to have arisen from more than just the direct effects of trade and immigration policy changes. We are particularly worried that 'catch-up hiring' in a few industries now appears over and job growth outside those industries has fallen to around zero. And while job openings remain at a decent level, they started to decline again earlier this year." Sign in to access your portfolio
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Gold Wavers as Traders Look to Jackson Hole and Ukraine Talks
(Bloomberg) -- Gold wavered as traders looked ahead to potential interest-rate signals from the Federal Reserve's annual gathering in Jackson Hole, as well as high-stakes diplomacy in Washington over efforts to end the war in Ukraine. Bullion traded in a narrow range over the past few sessions. Central bankers from around the world will gather at the retreat in Wyoming starting Friday, with markets largely expecting a reduction in US rates at the Fed's policy meeting next month. A Photographer's Pipe Dream: Capturing New York's Vast Water System Festivals and Parades Are Canceled Amid US Immigration Anxiety A London Apartment Tower With Echoes of Victorian Rail and Ancient Rome Princeton Plans New Budget Cuts as Pressure From Trump Builds The Fed's Raphael Bostic said after a tour of the southeastern US that he's open to adjusting rates soon, citing strains from Donald Trump's import tariffs and high borrowing costs squeezing business profits. Lower rates typically benefit gold because the precious metal doesn't bear interest. 'Markets increasingly expect the Federal Reserve to strike a more dovish tone at the upcoming Jackson Hole symposium, with traders largely looking past last week's slightly firmer U.S. inflation print,' said Priyanka Sachdeva, an analyst at Phillip Nova in Singapore. 'The broader market view is that inflationary pressures remain on a cooling path.' Meanwhile, Ukrainian leader Volodymyr Zelenskiy and his European allies were arriving at the White House to meet with Trump following his summit with Russia's Vladimir Putin last week, amid apprehension that he'll try to force Kyiv into making unpalatable concessions. Any signs of a ceasefire could ease demand for the precious metal as a haven. Gold has rallied by more than a quarter this year, reaching a record in April. Since then, prices have tracked sideways, with investors following the fallout from the US-led trade war, concerns over the strength of the global economy and geopolitical tensions. Central-bank buying has also helped to support bullion. Gold was little-changed at $3,333.06 an ounce as of 12:37 p.m. in New York. The Bloomberg Dollar Spot Index was up 0.2%. Silver, platinum and palladium edged higher. --With assistance from Laura Avetisyan and Yvonne Yue Li. Foreigners Are Buying US Homes Again While Americans Get Sidelined What Declining Cardboard Box Sales Tell Us About the US Economy Americans Are Getting Priced Out of Homeownership at Record Rates Living With 12 Strangers to Ease a Housing Crunch Bessent on Tariffs, Deficits and Embracing Trump's Economic Plan ©2025 Bloomberg L.P.
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Crypto markets slump ahead of Powell's Jackson Hole speech
Crypto markets slump ahead of Powell's Jackson Hole speech originally appeared on TheStreet. Bitcoin, Ethereum and other major cryptocurrencies slipped on Monday morning as global markets turned cautious ahead of Federal Reserve chair Jerome Powell's keynote at the Jackson Hole Economic Symposium later this week. Bitcoin fell more than 2% in 24 hours to trade just above $115,500, according to Kraken's price feeds. Ethereum dropped over 4% to $4,340, while XRP slid 4% to around $3.00. Solana, Dogecoin and Cardano also posted steeper losses, with SOL down 5% and ADA tumbling nearly 6%. The global crypto market cap shrank to $3.99 trillion, shedding nearly 3% overnight. Powell's final Jackson Hole appearance The selloff mirrors broader risk aversion across financial markets as traders brace for Powell's final Jackson Hole appearance before stepping down as Fed chair. The Wyoming summit has often been a stage for defining policy shifts. In 2022, Powell invoked Paul Volcker in a vow to crush inflation 'whatever the cost.' Last year, he hinted at loosening, saying 'the time has come for policy to adjust.' This time, Powell is expected to address stubborn inflation — still above the Fed's 2% target — alongside a cooling labor market. Futures markets have priced in a September rate cut, but analysts caution Powell may avoid confirming it this week. Liquidations Liquidation data underscored the volatility. More than $567 million worth of crypto positions were wiped out in the past 24 hours, with long traders hit hardest. Ethereum alone saw liquidations above $14 million, while Bitcoin accounted for nearly $3 million, per data from CoinGlass. Trading firm QCP Capital flagged early warning signs. 'BTC perpetuals across major venues started to trend lower since Friday,' the firm explained. 'For example, the BTC funding rate on Deribit, which was consistently above 20% for the past week, turned negative by Saturday and stayed there even as spot drifted higher over the weekend. A similar pattern on 1 August preceded a drop from 118k to 112k.' That divergence between spot and futures markets has traders bracing for more turbulence. According to QCP, 'Options flows are now skewed towards another leg lower as risk reversals have swung in favour of puts across tenors,' suggesting investors are paying up for downside protection ahead of Powell's speech. Inflation complicates the Fed's hand Hole comes at a delicate moment for monetary policy. Producer prices jumped 0.9% in July — far above the 0.2% forecast — raising questions about inflation's persistence. 'Thursday's higher-than-expected PPI numbers have complicated the Fed's policy framework,' QCP said, adding that 'the market will be looking for hints on the Fed's thinking ahead of its September policy meeting.' Despite the anxiety, QCP sees limited breakout risk in the immediate term. 'With implied vols still relatively low, the market does not expect a major breakout. Sideways trade seems likely, with dips near 112k attracting buyers and rallies toward 120k meeting supply, at least until Friday when Fed Chair Jerome Powell takes the stage,' the firm said. Meanwhile, institutional players continue to accumulate. Tokyo-listed Metaplanet disclosed it had added 775 BTC over the weekend, underscoring long-term confidence even as near-term sentiment weakens. Crypto markets slump ahead of Powell's Jackson Hole speech first appeared on TheStreet on Aug 18, 2025 This story was originally reported by TheStreet on Aug 18, 2025, where it first appeared.
