Kevin O’Leary says a three-part “witches’ brew” is just what markets need to break through volatility – and it all starts with a meaningful trade deal.
Speaking on “Mornings with Maria,” the O’Leary Ventures chairman said the White House is moving in the right direction by reviewing multiple trade proposals, but warned that things could remain shaky unless an actual deal is signed.
“We need more than just the job-owning 18-paper deals. We need to sign one. India would be good,” he told guest host Cheryl Casone.
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But the spotlight, he emphasized, remains on China.
“You’ve got to have a deal with China, and I understand China has not returned the calls yet, and I’m assuming they will,” he continued.
President Donald Trump has imposed tariffs of up to 145% on imports from the U.S. adversary, spawning a trade war which saw massive retaliatory tariff hikes against U.S. imports.
In a seeming clawback on the tough trade policy, Trump said tariffs imposed against China will decrease but will not reach “zero.”
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“145% is very high, and it won’t be that high,” Trump said while speaking to reporters in the Oval Office this week. “It won’t be anywhere near that high. It’ll come down substantially. But it won’t be zero.”
O’Leary says Trump is “clearly” throwing out olive branches to the U.S. adversary, something “necessary” to get the country’s leaders to come to the table.
The third ingredient to the “witches’ brew” would cut out all rhetoric about potentially firing Federal Reserve Chairman Jerome Powell. Trump told reporters he has no intention of firing Powell despite previously lambasting him for not lowering interest rates and saying, “If I want him out, he’ll be outta there real fast. Believe me.”
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“No more firing the Fed idea. That is not helpful to the markets. The market, the overall market — particularly the debt market, the Treasury market — really wants an independent Fed. Always has, always will, regardless of who’s in the executive office, so we’ve got to leave that alone,” O’Leary said.
Until a deal is secured, a resolution with China is achieved and the “firing the Fed” rhetoric fully fades, “we’re stuck in a range,” O’Leary says.
“Some days up 1,000, some days down 1,000, depending on what’s coming out of the White House — but we need all three, and I think that’s clear now.
“It’s easy to get that Fed thing resolved. Just stop talking about it. It’s clearly looking great among trading partners outside of China. The last holdout is China. We’ve got to get that thing going.”
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