Buffet senses signs of US economy slowly recovering

WARREN Buffett said yesterday that the US economy is gradually improving, helped by the efforts of Federal Reserve chairman Ben Bernanke to stimulate it, but that low interest rates have made bonds “terrible investments”.

By The Newsroom

Published 7th May 2013, 10:13 BST

Speaking on CNBC television, Mr Buffett said the economy is benefiting from improvement in areas that had not previously performed well, particularly homebuilding. He also said the improved economy is helping create increased traffic for NetJets, Berkshire Hathaway’s private plane unit, and could drive Berkshire’s railroad unit Burlington Northern Santa Fe to record earnings this year.

“The economy is moving forward, but at a slow pace,” he said. “Demand has come back, but slowly.”

Mr Buffett spoke on CNBC after Berkshire’s annual shareholders meeting over the weekend. The world’s fourth-richest person said low benchmark interest rates, including overnight rates that have been effectively zero since late 2008, can help stimulate demand.