Warren Buffett's first comments after stepping down: No good targets in the US stock market, sold Apple too early, strongly supports the zero-inflation goal

Ask AI · Amid the controversy over zero inflation targets, how do Buffett’s views challenge current policy?

On Tuesday, Buffett announced the restart of his charitable lunches and offered views on multiple market hot-button topics. He admitted that the pullback in the US stock market is “not much,” but that the market still lacks high-quality targets. Apple, while it sold too early, still posted profits of over $100 billion, and at current prices, it offers no appeal for adding positions.

Berkshire Hathaway chairman Warren Buffett (Warren Buffett) said that after this year’s stock market decline, the company can’t find very many things on the market worth buying.

On Tuesday, during an interview on CNBC’s “Squawk Box,” Buffett said that after the Dow (DJI) and the Nasdaq (IXIC) fell 10% from their highs and entered a pullback zone, “we haven’t found any opportunities in the stock market.” The S&P 500 index is down 7.5% year to date as of Monday.

When CNBC host Becky Quick asked about the market decline, Buffett said: “This isn’t anything.” He added that during his tenure as head of Berkshire since 1965, the market had fallen 50% three times.

Buffett added that if the market drops sharply, Berkshire will put money in. He noted that Berkshire holds more than $350 billion in cash, most of which is in Treasury bills. Buffett said, Berkshire bought $17 billion of Treasury bills in its weekly auction on Monday.

Buffett said that he can make stock investments at Berkshire, but any investment decision must first be discussed with CEO Greg Abel (Greg Abel), who manages a $300 billion stock portfolio as part of his responsibilities. At the end of 2025, Abel will succeed Buffett as CEO.

In an interview lasting more than an hour, Buffett discussed a range of topics—his first interview since stepping down as CEO at the start of 2026. Buffett will not attend the May Berkshire annual shareholder meeting to answer shareholder questions. Abel will go on stage alongside several other senior Berkshire executives, while Buffett will sit in the audience with other Berkshire directors.

“Apple sold too early”

On Tuesday, Buffett said he sold Apple’s (AAPL) stock too early, but he won’t buy more in the current market environment—though he will later.

“I sold too early. But I bought earlier, so,” Buffett said, adding that his appearance was mainly to announce the restarting of his famous charitable lunch program.

According to InsiderScore, although Berkshire cut its stake at the end of last year to $61.96 billion, Apple is still its largest holding.

Buffett said: “I’m happy that it’s become our largest holding, but I’m not happy that it makes up nearly the total of all the other holdings.”

“If the company could offer a (cheaper) price, we could buy a lot,” he added, “but that’s impossible in the current market environment.”

Buffett said the company’s pre-tax stock profits have exceeded $100 billion, and when it comes to evaluating Tim Cook’s leadership of the company, his assessment is higher than that of Steve Jobs.

Buffett said: “He said: ‘Tim Cook played the hand in his hands better. He couldn’t do the things Steve Jobs did back then, but the hand Jobs handed to him—Jobs himself may not have been able to play it as well as Cook.’”

“Tim is an outstanding manager, and he’s a very nice person. Somehow, he gets along with everyone in the world,” he added, “and that’s a skill I don’t have. For example, my partner Charlie Munger certainly doesn’t.”

Supporting a zero inflation target

In his Tuesday interview, Buffett also discussed the Federal Reserve’s inflation target. The Fed’s dual mandate is to achieve maximum employment and price stability. To keep price growth steady, the Fed set a 2% inflation target, but this target has not been met for more than five years.

Some economists and Trump administration officials argue for raising the inflation target to 3%, but on Tuesday Buffett said that even the current 2% target is too high—he actually supports a zero inflation target.

“I want them to set a zero inflation target,” Buffett told CNBC. “Once you tolerate 2% inflation, the long-term compounding effect will be very significant—that’s basically telling people that if their returns on capital are below 2%, wealth is shrinking.”

However, zero inflation is not a reasonable goal. If the Fed targets zero inflation, the risk of deflation would rise significantly, and deflation is typically a precursor to an economic recession—while also weakening the Fed’s flexibility in monetary policy.

“Zero inflation sounds great, but it could lead to a deflationary spiral,” said former Philadelphia Fed president and current Wharton School professor Patrick Harker in September last year. “That’s also why most central banks set their targets at around 2%.”

For example, between September 2007 and December 2008, the Fed cut the federal funds rate sharply from 5.25% to the 0%-0.25% range. If inflation had been zero at the time, rate cuts would have directly led to negative real interest rates.

Another major benefit of maintaining a positive inflation target is improving labor market efficiency. Mild inflation reduces the need for companies to cut wages during downturns, and small wage increases are also easier to implement—thereby suppressing overly rapid growth in real wages, reducing labor costs, and limiting large-scale layoffs.

The debate over a reasonable inflation target has been going on for many years. In the late 1990s, the US Congress considered a bill to make the Fed’s mandate single-purpose—price stability.

At the time, the Brookings Institution opposed a zero inflation target, saying it would impose “significant real costs” on the US economy. Research estimated that it would raise the unemployment rate and drag annual GDP growth by 1 to 3 percentage points.

In addition, whether the inflation target is raised or lowered, it would harm the Fed’s credibility—especially given that it has missed the 2% target for about five years in a row. Once public trust is lost, it could trigger a vicious cycle of inflation.

Although Buffett wants inflation to be lower, he said on Tuesday that he values stability in the banking system more, and that he supports the overall performance of Federal Reserve Chair Powell in recent years—especially praising his decisions during the pandemic to rapidly cut rates, safeguard credit liquidity, and stabilize the financial system.

“If he had waited another two or three weeks, it would have been disastrous. Once the dominoes start falling, the speed is far beyond what anyone imagines,” Buffett said. “His approach was absolutely correct.”

Buffett also said that Powell and former Fed chair Paul Volcker are the “heroes” in his mind of the Federal Reserve.

Epstein documents released—no conversation with Bill Gates

Buffett also discussed the documents of Jeffrey Epstein and his annual donations to the Gates Foundation, saying that he will “wait and see” whether he will continue making annual contributions to the foundation in the future. His next large annual donation is expected in June.

The Gates Foundation is led by Bill Gates. Because of his relationship with Epstein, Gates has been mired in negative coverage, including additional details disclosed in the latest batch of Epstein documents.

Since 2006, Buffett has donated nearly $50 billion per year to the Gates Foundation, including about $5 billion donated last June. In 2024, Buffett said that after his death, he would no longer donate to the foundation—which runs counter to his original pledge when he began donating in 2006. When asked about his views on the Gates Foundation and Gates, Buffett responded cautiously.

Buffett said that since the Epstein documents were made public, he has not met or spoken with Gates. Buffett said these documents were read to him because he can’t read them himself—his eyesight is “too poor.”

Buffett pointed out that the Gates Foundation has $96 billion in resources—more than any other foundation—which comes mostly from wealth accumulated from Microsoft stock and other investments held by Bill Gates.

Other beneficiaries of Buffett’s charitable giving include family foundations, including three foundations managed by each of his three children. After his death, these foundations will receive about $140 billion from Buffett’s estate.

Buffett said that thankfully Epstein never came to Omaha, otherwise he might have met Epstein—possibly even posed for a photo with him. Buffett said he has never met Epstein. He said: “Thank goodness I’ve never gotten close to that guy.”