Warren Buffett Said 'I Am 100% For The Independence Of The Fed:' For Over 20 Years, He's Warned, “We Do Not Want To Fool Around With It”

Legendary investor and Chairman of Berkshire Hathaway Inc., BRK BRK Warren Buffett, has been consistently defending the Federal Reserve’s independence over the past twenty years.

From live interviews to town halls, Buffett has frequently emphasized the importance of protecting the Fed from political meddling.

At a time when President Donald Trump is making headlines for his repeated jabs at Fed Chair Jerome Powell, and going back and forth on his intention to fire him, Buffett’s views merit attention.

Throughout the years, his stance has been steady: Interfering with the Fed’s autonomy puts the economy at the risk of long-term damage.

What He’s Said: In a November 2009 CNBC interview, Buffett said, “We do not want to fool around with the independence of the Fed.” He continued, warning that any attempts to weaken the central bank’s authority could “lead to a lot of mischief.”

That was not a one-off statement. In another conversation about fiscal policy, Buffett said: “I am 100% for the independence of the Fed… if you have a central bank that is bowing to the will of Congress either directly or indirectly through some of various mechanisms, it would be a disaster.”

Buffett has highlighted that an independent Fed is vital not just for stability, but for managing crises: “Ben Bernanke was essential to keeping us from going into the abyss,” he said, lauding the former Fed Chair’s response to the 2008 financial crisis.

In a similar vein, he credited Paul Volcker as “essential to this country coming out of that 1981–82 period.”

See Also: Elizabeth Warren Says, ‘If Trump Illegally Fires Fed Chair Powell, He’ll Crash Our Markets, Cause More Economic Pain To American Families’

Why It Matters: To Buffett, the Fed’s role is uniquely challenging. During a 2008 appearance on Squawk Box, he said: “They’ve got a tough problem with these dual goals of essentially stimulating growth and, at the same time, containing inflation. They are in direct conflict.”

He added, “There are no obvious answers. There are trade-offs… But I admire the people that take on the job.”

Buffett has also pushed back against the perception that the Fed has limitless power. In the same interview, he said: “I think they are thought to have more power than they really do have. Ben Bernanke does not have a magic wand.”

U.S. stock futures moved upward Tuesday night after President Donald Trump told reporters from the Oval Office that he has “no intention” of firing Federal Reserve Chair Jerome Powell, adding, “I never did.” S&P 500 futures rose 1.54% to 5,396, while Nasdaq futures climbed 1.87% to 18,728. Japan’s Nikkei 225 also gained 1.89%, reaching 34,869.

Read Next:

Photo courtesy: mark reinstein / Shutterstock.com