On multiple occasions, President Trump has criticized Fed Chair Jerome Powell for raising rates. Reportedly, President Trump considered firing Powell last year. In November, speaking with the Washington Post, President Trump said, “So far, I’m not even a little bit happy with my selection of Jay.”
On Christmas Eve, President Trump tweeted that “The only problem our economy has is the Fed. They don’t have a feel for the Market.” In March, President Trump has already taken a swipe at Powell without naming him. Calling the US dollar strong, President Trump referred to “a gentleman that likes raising interest rates in the Fed, we have a gentleman that loves quantitative tightening in the Fed, we have a gentleman that likes a very strong dollar in the Fed.”
In an interview with CNBC, Warren Buffett, Berkshire Hathaway’s (BRK-B) chairman, seemed to support Powell. Buffett said, “I think he’s a terrific choice for Federal Reserve Chairman.” He also said, “He is a smart man and he’s– he’s very levelheaded, and he– but he understands both business and economics, and I don’t think you could have a better chairman.”
Apparently, Buffett’s investment decisions aren’t influenced by the Fed’s policy decisions. However, he does attach importance to long-term interest rates (SPY). Berkshire Hathaway’s top holdings include Apple (AAPL), Coca-Cola (KO), Kraft Heinz (KHC), Bank of America (BAC), Goldman Sachs (GS), Wells Fargo (WFC), and JPMorgan Chase (JPM)
In Buffett’s annual shareholder letter, he took shots at President Trump without actually naming him. Read Are Buffett and Trump in a Proxy War of Words? to learn more.
Next, we’ll discuss Buffett’s views on US-China trade relations.