The current economic environment is one that no one could have seen coming, Warren Buffett said.
"No economics textbook I know that was written in the first couple of thousand years that discussed even the possibility that you could have this sort of situation continue and have all variables stay more or less the same," Buffett told CNBC's Becky Quick ahead of the annual Berkshire Hathaway shareholders meeting in Omaha. "
Buffett highlighted that unemployment is at generation lows, yet inflation and interest rates are not rising. While at the same time the U.S. government continues to spend more money than it takes in.
The Labor Department said the U.S. unemployment rate fell to 3.6% in April, the lowest since 1969. However, inflation was up just 1.6% on a year-over-year basis in March. That's well below the Federal Reserve's 2% inflation target. The overnight rate in the U.S. is also below historical levels despite four rate hikes in 2018. The central bank kept rates unchanged at its meeting earlier this week.
These conditions are not sustainable for the long term, Buffett said.
"I don't think our present conditions can exist in terms of fiscal and monetary policy and various other elements across the political landscape," he said. "I think it will change, I don't know when, or to what degree. But I don't think this can be done without leading to other things."
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