Billionaire investment guru Warren Buffett recently provided some insight into his views of the Federal Reserve when giving a speech at Georgetown University.
One important thing that the investment guru noted was that amid the robust stimulus that the central bank has provided, which resulted in its balance sheet surging to more than $3 trillion a year, the Fed has the mobility to change its quantitative easing plans as needed, according to Bloomberg News.
The Fed “is under no pressure, none whatsoever to have to deleverage,” Buffett said, the media outlet reported. “So it can pick its time, and if you have somebody wise there – and I think Bernanke is wise, and I certainly expect his successor to be – it can be handled. But it is something that’s never quite been done on this scale. It will be interesting to watch.”
This flexibility could have implications for those who purchase precious metals, as the robust stimulus of the Fed has been credited by many as putting upward pressure on the price of gold over the last several years.
Buffett also noted that the robust bond purchases have placed downward pressure on interest rates, and this has served as a boon to the value of many asset values, according to The Telegraph.