OMAHA, Neb. — Billionaire Warren Buffett says he doesn’t expect the Federal Reserve to raise interest rates this year because of the impact it would have on the both the U.S. and world economies.
The economies in Europe and Asia are struggling and a hike in U.S. rates would further strengthen the U.S. dollar versus the euro, yen and other world currencies. The dollar’s recent rise has already is already crimping profits of U.S. corporations with big overseas sales.
“It’d be very tough for (the Fed) to raise rates,” Buffett said in an interview with Fox Business on Wednesday. “I think you’d have a lot of international repercussions.”
Buffett also reiterated his support for the controversial Keystone XL pipeline. Berkshire Hathaway’s chairman and CEO said he thinks the pipeline to carry Canadian crude oil to the Gulf Coast should be approved and built.
He said he has no plans to sell any of Berkshire’s shares of Moody’s or Coca-Cola because both still hold strong competitive advantages.
Moody’s and the other major credit ratings agency, Standard & Poor’s, are in a great position because they don’t require much capital and companies have to get their opinions before selling bonds, Buffett said.
“It’s a fantastic business,” he said.
Buffett’s Berkshire Hathaway owns more than 80 businesses — including furniture, insurance, railroad, utility and candy companies — and it holds major stakes in Wells Fargo, IBM, American Express and other firms.
He said he continues looking for more businesses to buy, and he has about $60 billion on hand to complete a deal.
At the end of February, Buffett will release his annual letter to Berkshire shareholders. He plans to reflect on 50 years of leading the conglomerate and what the future may hold. Berkshire Vice Chairman Charlie Munger has also written a letter for shareholders reflecting on the company.
Buffett said he expects the crowd at this year’s shareholder meeting in May will exceed 40,000 for the first time. The 85-year-old reiterated that he has no plans to retire and hopes to stick around a long time.
Previously Buffett has said the company has a plan to replace him when the need arises by promoting one of three internal managers to CEO and handing over his investment management duties to a pair of investors who already help manage Berkshire’s portfolio.
Once Buffett is gone, Berkshire also plans to name a non-executive chairman that will likely be Buffett’s older son, Howard.
Buffett gave the interview while sitting inside the Nebraska Furniture Mart’s electronics showroom. That Berkshire subsidiary is getting ready to open a huge new store in the Dallas area, and Buffett predicted that store will generate $1 billion in sales a year after it opens this spring.