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Billionaire Warren Buffett said Monday the stock market would be viewed as "cheap" now if interest rates continued to remain low.

"If these interest rates were to continue for 10 years, stocks would be extremely cheap now," the chairman and CEO of Berkshire Hathaway said Monday on CNBC's "Squawk Box," two days after Berkshire's annual shareholder meeting.

If rates normalize, stocks would be on the high side on a valuation basis, he said.

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Stocks are cheaper than bonds, which are "very overvalued," he said.

"If I had an easy way, and a nonrisk way, of shorting a lot of 20-year or 30-year bonds, I would do it. But that's not my game. It can't be done in the quantity that would make sense for us."

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He said the Federal Reserve has done the right thing with it easy monetary policy.

The U.S. central bank ended its latest round of bond purchases last year and now policymakers appear to be on the brink of their first rate hike in nearly a decade. Many economists believe September is the most likely date for liftoff.

Buffett said he has no idea when the Fed might move. "They've fooled me so far. So I've been wrong," he said. "I would have thought by now you would have seen much higher rates than we have now, which is essentially nothing."

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He added that the Fed should stay low as "Europe keeps following the present policies." The European Central Bank has initiated a Fed-style quantitative easing bond-buying program to help boost the euro zone economy.

"If you have negative rates in Europe, I think there a lot of consequences to raising rates significantly here," Buffett said.

More than $2.1 trillion of outstanding euro zone sovereign debt now has a negative yield, according to calculations by Goldman Sachs.