Warren Buffett says Berkshire Hathaway is seeing ‘very substantial inflation’ and raising prices

Warren Buffett at Berkshire Hathaway’s annual meeting in Los Angeles, California. May 1, 2021.

Gerard Miller | CNBC

Warren Buffett is seeing inflation amongst Berkshire Hathaway’s assortment of companies because the financial recovery from the pandemic kicks into excessive gear.

“We are seeing very substantial inflation,” the Berkshire chairman and CEO stated on the conglomerate’s annual shareholder meeting Saturday. “It’s very interesting. We are raising prices. People are raising prices to us and it’s being accepted.”

“We’ve got nine home builders in addition to our manufactured housing and operation, which is the largest in the country. So we really do a lot of housing. The costs are just up, up, up. Steel costs, you know, just every day they’re going up,” the legendary investor added.

Berkshire Hathaway owns one of many nation’s largest homebuilders Clayton Homes, together with corporations comparable to Benjamin Moore paints and Shaw flooring.

Inflation has begun to speed up just lately attributable to a number of elements, together with rising demand and struggles with some areas of the availability chain, in addition to simply simpler comparisons with the tempo of a year in the past. The core personal consumption expenditure worth index, which excluded risky meals and vitality prices, rose 1.8% in March, the quickest tempo since February 2020. The headline quantity elevated 2.3%, the quickest tempo for that measure since 2018.

Federal Reserve Chairman Jerome Powell reiterated final week that he expects inflation to indicate a short lived transfer increased then settle again to across the central financial institution’s 2% goal. The Fed has resolved to not increase rates of interest till the financial system sees full, inclusive employment, as long as inflation does not run too far above the objective.

Higher worth pressures might weigh on shares as inflation erodes the worth of future company income, and may cause a spike in Treasury yields.

For a full recap of Buffett’s feedback on the annual meeting, see right here.

— CNBC’s Jeff Cox contributed to this text.

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