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Warren Buffett Tells CNBC U.S. Inflation is "Exploding"

Warren Buffett says inflation in the U.S. is "exploding" and he urged the Federal Reserve not to signal in any way that controlling prices takes a back seat to encouraging economic growth.

"I think inflation is really picking up... Whether it's steel or oil ... We see it everyplace. It's exploding," Buffett told Becky Quick in a live interview on CNBC's Power Lunch. He spoke ahead of a charity lunch he is hosting in New York City.

While Buffett stressed that the Fed needs to control inflation, he also said the central bank should also be concerned about slowing economic growth, and said he's glad he doesn't have Chairman Ben Bernanke's job. Pressed by Becky about what he would do if he were Fed chairman, Buffett joked that he'd "resign."

The Federal Reserve announces its latest decision on interest rates around 2:15p ET today (Wednesday.)

WARREN BUFFETT'S POWER LUNCH INTERVIEW:
TRANSCRIPT AND LIVE BLOG ARCHIVE

Buffett told Becky that from a consumer's perspective, the economy's weakening is getting worse. He's been saying for several months that the U.S. is effectively in a recession.

Buffett dismissed suggestions that "speculators" are responsible for the high price of oil, saying energy prices are being driven solely by supply and demand.

Asked about InBev's unsolicited $46 billion takeover bid for Anhesuer-Busch , Buffett said he hasn't talked to anyone about it and hasn't taken sides. He implicitly dismissed reports he favors the InBev bid. At this point, he says, the InBev-Bud battle is just an "interesting spectactor" sport. Buffett's Berkshire Hathaway owns a 5% stake in St. Louis-based Anhesuer, making it the brewer's second largest shareholder.

Buffett said he doesn't think either Barack Obama or John McCain will have trouble raising enough money for their presidential campaigns. While he's a long-time Obama supporter, Buffett did say the Illinois Senator should not have changed his position on accepting public financing. Buffett will be in Chicago next week for some Obama fund-raising events.

Buffett repeated his call for higher taxes on the "super-rich" so that the middle-class pay less.

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See Warren Buffett Watch on CNBC's The Call, most weekday mornings at 11:50a ET

Questions? Comments? Email me at buffettwatch@cnbc.com