What does the world’s richest investor see up ahead for the US economy?
“Billionaire investor Warren Buffett says he's concerned about ‘stagflation,’ or slowing in the U.S. economy while inflation accelerates.
‘We're right in the middle of it right now,’ said Buffett, chairman of Omaha, Nebraska-based Berkshire Hathaway Inc., in an interview on Bloomberg Television today. ‘I think the ‘flation’ part will heat up and I think the ‘stag’ part will get worse.’
Buffett, the world's richest person, runs a company with a $72 billion stock portfolio and businesses ranging from candy to corporate jet leasing and insurance. He's said the U.S. housing slump has been a drag on Berkshire's earnings, adding today he's unsure when the economy will recover.
‘It's not going to be tomorrow, it's not going to be next month, and may not even be next year,’ said Buffett, 77.
The U.S. economy will expand 1.4 percent in 2008, the weakest performance since 2001, according to a survey by Bloomberg. The Federal Reserve today left its benchmark interest rate at 2 percent, saying ‘uncertainty about the inflation outlook remains high.’ Consumer prices rose 4.2 percent in the 12 months ended in May, the fastest pace since January.”