Billionaire businessman Ken Langone told CNBC on Wednesday he expects higher-than-usual inflation to hit the U.S. economy for longer than the Federal Reserve anticipates.

In an interview on “Squawk Box,” the Home Depot co-founder said both raw material and labor shortages have caused increased consumer prices during the pandemic economic reopening. Now, the potential for trillions of dollars of additional government spending on top of that is worrisome, Langone said.

“I think you’re going to take a white-hot fire and throw a five-gallon gas can on top of it. You’re going to have flames so high it’s going to be incredible,” Langone said. “I don’t believe this is transitory. I don’t believe this is temporary,” he added, referring to the long-held view of Fed Chairman Jerome Powell about recent increases in inflation.

The Fed chief is set to hold a news conference at 2:30 p.m. ET, about 30 minutes after central bankers’ wrap up their two-day July meeting and deliver their latest policy statement.

Powell and other central bank officials for months predicted inflation will pick up as Covid restrictions ease and consumers start to engage in economic activities they paused during the pandemic such as travel. That, combined with supply-chain bottlenecks also stemming from the health crisis, created a situation where prices will rise faster than normal, they warned.

That’s exactly what has happened. Most recently, the Labor Department’s consumer price index rose at its fastest pace in more than a dozen years, jumping 5.4% in June compared with a year earlier.

The question being asked now is whether the inflation rate will retreat toward the Fed’s target of 2% on average on its own, or whether the central bank needs to exercise the levers of monetary policy to tamp down on price pressures.

In Congressional testimony earlier this month, Powell acknowledged inflation “has increased notably and is likely to stay way “in coming months before moderating.”

“It’s just a perfect storm of high demand and low supply and it should pass. Unless we think there’s gonna be a multi-year, many-year shortage of used cars in the United States, we should look at this as temporary. We very much think that it is,” Powell said, alluding to the role surging used-car prices have played in hotter-than-forecast inflation readings.

Langone, for his part, zeroed in on the Democrats’ $3.5 trillion budget proposal. The longtime Republican donor said he’s on board with the smaller bipartisan infrastructure proposal that Congress is currently negotiating. America definitely needs to upgrade its roads and bridges, he said, adding he also supported last year’s multi-trillion dollars worth Covid relief packages, given the uncertainty in the pandemic’s early stages.

But Langone said the Democrats’ budget proposal, which among other provisions would create a national paid family and medical leave program, is too expensive at a moment, when too many dollars already appear to be chasing too few goods. Many businesses have already raised prices to offset the higher wages they started to pay to attract workers, Langone said.

“The fact is … if this hyperinflation happens, it will be too late to recognize. Maybe you’re going to need this $3.5 trillion thing, but not now. Not now. Watch it. See what we’ve done, what we’ve put in place,” Langone said.

“What I’m saying right now is, please, please, Congress, be careful. You’re playing with fire. If you’re wrong, the little guy, the guy you say you want to help, is going to get punished severely, and that’s going to be too bad.”

— CNBC’s Jeff Cox contributed to this report.