Buffett: The economy and inflation are worsening

Buffett told CNBC in a live interview Wednesday that all the data he sees from Berkshire Hathaway Inc. subsidiaries shows the economy weakening.

"Everything connected with construction and with consumer, I see weakness, and if anything, it's accentuating a little bit."

Buffett also said he thinks inflation is picking up, especially in steel and oil, so it should be a concern for the Federal Reserve.

But Buffett said he would have been surprised if the Federal Reserve were to announce a rate cut Wednesday afternoon.

The Fed left rates unchanged.

"I think the Fed has to be careful not to do anything that signals that they regard inflation as a secondary goal and something they'll worry about later," he said.

Buffett also said he believes supply and demand, not market speculation, is what's driving oil prices to new heights.

Oil futures fell Wednesday after the Energy Department said the nation's supplies of fuel and oil were larger than expected last week, but prices remain above $130 a barrel.

Buffett said he disagrees with the idea that speculation was driving oil prices higher. At least nine bills proposing limits on that oil speculation have been introduced in Congress in recent weeks.