Voters in the U.S. are “pissed” about inflation and the Democrats are going to have a difficult time at next year’s midterm elections, celebrity investor Kevin O’Leary told CNBC on Tuesday.
“People are pissed,” he told CNBC’s “Capital Connection.”
“They’re pissed about inflation, I don’t have a better word than saying that.”
“They’re unhappy. My employees are unhappy. They’re going to vote with the cost of bread,” said the “Shark Tank” investor.
Consumer prices in the U.S. jumped 6.2% in October, the biggest surge in more than 30 years.
Fed officials have consistently said the spike in prices will be temporary and is a result of supply chain disruptions, but O’Leary holds a different view.
“We are seeing real inflation. We’re seeing gasoline prices up remarkably, the price of food and bacon, just the basics that our employees buy — those are up materially,” he said.
The last thing we need is an inflation bill. We don’t need any more money in this economy, the economy’s on fire.
Kevin O’Leary
Chairman, O’Shares ETFs
O’Leary, who is chairman of O’Shares ETFs, attributed rising energy prices to the Biden administration’s efforts to pivot away from fossil fuels.
He said the U.S. achieved energy independence and saw prices fall, but then came a reversal at the federal level.
“All of a sudden, we’ve got this image of tankers from unfriendly regions rolling into Boston to provide energy to the East Coast. That’s broken,” he said. “As a result, you’ve seen the price of energy spike. That is not sitting well with the voting constituency.”
U.S. crude futures and international benchmark Brent crude have both gained about 55% so far this year as demand outpaced supply.
U.S. President Joe Biden was elected to solve the problems arising from the pandemic, but may have created other issues with his trillion-dollar bills, said O’Leary.
“He was not given a mandate to spike inflation, he was not asked to be FDR,” he said. Former President Franklin D. Roosevelt in the 1930s increased federal spending when he introduced a series of New Deal programs that expanded social policies.
“The last thing we need is an inflation bill,” he said, referring to Biden’s $1.75 trillion plan that was approved by the House last week.
“We don’t need any more money in this economy, the economy’s on fire,” he said.
The Build Back Better Act is expected to fund a slew of projects from education to health-care to renewable energy credits and housing. It still needs to go to the Senate where it is likely to be revised.
From an investor’s perspective, the bill will add “way too much stimulus,” said O’Leary, adding that he’s worried about hyperinflation. He said he expects the plan to be altered drastically by lawmakers.
“The Senate’s going to tear that thing to pieces … just stop it altogether,” he said.
— CNBC’s Greg Iacurci and Christina Wilkie contributed to this report.
