By CCN.com: As the Dow edges toward new record highs, Warren Buffett says US stocks have plenty of room to run. But on one condition: that interest rates remain low.

It’s a big “if,” but one that US president Donald Trump is desperate to maintain. Trump has repeatedly called for a one percent cut in interest rates and slammed the Federal Reserve for moving in the other direction.

If Trump gets what he wants, and interest rates stay low, the Dow Jones Industrial Average (DJIA) is poised for much bigger gains.

Warren Buffett: “I Think Stocks Are Ridiculously Cheap”

Speaking to CNBC, Buffett said the current mix of high employment, five percent budget deficit, and ultra-low interest rates is like “Nirvana” for stocks.

“We’re sitting with very, very little inflation with a Federal Reserve that put a target for two percent on it not that long ago and it looks like Nirvana, it looks like we’ve found the promised land, where essentially money doesn’t cost anything and… you can have full employment and no inflation.”

This perfect combination of factors has sent the Dow Jones Industrial Average more than 30 percent higher in just two years. Buffett goes on to explain:

“Now, if [these conditions persist], then stocks are ridiculously cheap.”

Trump Demands Lower Interest Rates to Fuel Stock Market

Donald Trump is one figure who would like to see these “Nirvana” conditions persist. Last month the president said:

“We have the potential to go up like a rocket if we did some lowering of rates, like one point, and some quantitative easing.”

The president even called on the Federal Reserve to lower interest rates by one percent in order to fuel stock market growth.

China is adding great stimulus to its economy while at the same time keeping interest rates low. Our Federal Reserve has incessantly lifted interest rates, even though inflation is very low, and instituted a very big dose of quantitative tightening. We have the potential to go… — Donald J. Trump (@realDonaldTrump) April 30, 2019

….up like a rocket if we did some lowering of rates, like one point, and some quantitative easing. Yes, we are doing very well at 3.2% GDP, but with our wonderfully low inflation, we could be setting major records &, at the same time, make our National Debt start to look small! — Donald J. Trump (@realDonaldTrump) April 30, 2019

As CCN.com reported, the Federal Reserve ignored his pleas and kept interest rates on hold. After raising rates four times in the last year, Fed chairman Jerome Powell aims to hold firm on the current rate for the rest of 2019. Trump hit back:

“If the Fed had done its job properly, which it has not, the Stock Market would have been up 5000 to 10,000 additional points.”

Will the Dow Keep Rising?

Warren Buffett did say the current economic climate won’t last forever.

“I probably could not have conceived of a world where you would have full employment, five percent budget deficits with actually the probability of those rising from that level and at the same time have the long-bonds [rate] at three percent, I would have said that couldn’t happen.”

The Oracle of Omaha said that something will have to give. Either the Fed will be forced to raise rates or the economy will buckle. While the era of cheap money has fueled incredible stock market growth, Buffett said we’re now at an “impossible” convergence.

“The convergence of these factors would have seemed impossible to me and generally if I feel something is impossible it’s going to change over time. I don’t know in what way, but I don’t think we can continue to have these variables in this relationship.”

For now, at least, the US interest rate will remain at relative lows. And with a president ready to slam the Fed for any further monetary tightening, this Nirvana could allow stocks to forge new highs yet.