Billionaire investor and former CEO of Berkshire Hathaway Warren Buffett stated on Tuesday that he would prefer the Federal Reserve to set its inflation target at 0%.
When asked what his priority would be if he were leading the Fed, Buffett expressed greater concern about inflation compared to the central bank's employment goals, while also emphasizing the importance of banking system stability. He stressed that he hopes the central bank would adopt a zero-tolerance policy toward inflation, explaining that if the Fed tolerates 2% inflation, its effects can compound and magnify rapidly.
Buffett remarked, "If I were in charge of the Fed, my focus would be entirely on inflation and the stability of the banking system."
The billionaire investor also commented that Federal Reserve Chair Jerome Powell’s decision to cut interest rates was correct, adding that failing to do so would have been a "disaster." However, he declined to comment on whether Powell had waited too long to cut rates, as suggested by former President Donald Trump.
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