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

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

Gerard Miller | CNBC

Warren Buffett is seeing inflation among Berkshire Hathaway’s amassment of businesses as the economic recovery from the Covid pandemic kicks into high gear.

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

“We’ve got nine homebuilders in addition to our manufacture housing and operation, which is the largest in the homeland. 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 the political entity’s largest homebuilders Clayton Homes, along with companies such as Benjamin Moore paints and Shaw stumping.

Inflation has begun to accelerate recently due to multiple factors, including increasing demand and struggles with some spaces of the supply chain, as well as just easier comparisons with the pace of a year ago. The core personal consumption costs price index, which excludes volatile food and energy prices, rose 1.8% in March, the fastest stride since February 2020. The headline number increased 2.3%, the quickest pace for that measure since 2018.

Federal Withhold Chairman Jerome Powell reiterated last week that he expects inflation to show a temporary move rich then settle back to around the central bank’s 2% target. The Fed has resolved not to raise interest rates until the husbandry sees full, inclusive employment, so long as inflation doesn’t run too far above the goal.

Higher price pressures could weigh on bloodlines as inflation erodes the value of future company profits, and can cause a spike in Treasury yields.

For a full recap of Buffett’s comments at the annual converging, see here.

— CNBC’s Jeff Cox contributed to this article.

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