At the Berkshire Annual Meeting 2024, the ‘Oracle of Omaha’, Warren Buffett, expressed his view on an array of issues surrounding his billion-dollar empire and the world in and around it. Speculations are rife concerning the succession of his holding company, Berkshire Hathway, and its future.
National Debt: Not A Problem
Nevertheless, the 93-year-old touched upon various issues. One of the issues that stood out was the US’s inflation rate and its debt. According to reports, Buffett was not particularly concerned about the world’s largest economy’s debt. The current national debt of the US stands at USD 34 trillion. He instead laid emphasis on the US deficit. The US deficit is projected to be in the range of 5.3 per cent of the US gross domestic product.
Buffet went on to say, “There isn’t any alternative to the dollar as a reserve currency.” Buffett, in what appears to be certain shift, pressed on the need to focus on fiscal policy rather than the urge to fixate over the Jerome Powell-led Federal Reserve.
The US Fed has held the interest rate in the range 5.25 per cent to 5.50 per cent for multiple quarters now. |
‘US Fed Not Policymaker’
For context, the whole economic paradigm, which is dependent on the Fed has been looking forward to a cut in the interest rates. The US Fed has held the interest rate in the range 5.25 per cent to 5.50 per cent for multiple quarters now. This is said to be the highest rate that the country has seen in over 20 years. The US fed has eluded a rate cut, given the inflation figures that have continued to rise over the past few months. The inflation rate rose from 2.9 per cent in December 2023, to 3.1 per cent in January. It increased further in 3.2 per cent in February and spiked to 3.5 per cent in March.
The dollar, being the world’s reserve currency, allows the US to borrow far more eloquently compared to its European and Asian counterparts.
In addition, he also shared his thoughts on investing in India. Buffett deemed the Indian market to be unexplored.
In the absence of his long-time business partner and confidant, Charlie Munger, who passed away in 2023, Buffet answered the shareholders, with Greg Abel and Ajit Jain.
