Warren Buffett Is Buying Treasuries Regardless of US Downgrade by Fitch

Warren Buffett now owns more T-bills than the Federal Reserve

Warren Buffett's Berkshire Hathaway now owns more short-term Treasurys than the Federal Reserve. The Treasury is borrowing $3 trillion in three months to pay for the pandemic response, a record sum that dwarfs the previous record.

Despite the recent Fitch downgrade of the US, Buffett is betting that Treasuries are a safe investment. He has been buying them hand over fist in recent months, and now owns more than $140 billion worth.

Why is Buffett buying Treasuries?

Treasuries are a safe investment

Treasuries are considered one of the safest investments in the world. They are backed by the full faith and credit of the United States government, and have never defaulted.

Interest rates are low

Interest rates are currently at historic lows, which makes Treasuries more attractive to investors. The yield on the 10-year Treasury note is currently around 1.5%, which is well below the rate of inflation.

Buffett is betting on the US economy

Buffett is betting that the US economy will recover from the pandemic and that interest rates will remain low for the foreseeable future. If he is right, then Treasuries will continue to be a good investment.

What does this mean for investors?

Buffett's purchase of Treasuries is a sign that he is confident in the US economy. Investors who are looking for a safe place to park their money may want to consider following his lead.

Here are some key takeaways from this news:

• Warren Buffett now owns more T-bills than the Federal Reserve.
• Buffett is betting that Treasuries are a safe investment.
• Interest rates are low, which makes Treasuries more attractive to investors.
• Buffett is betting on the US economy.
• Investors who are looking for a safe place to park their money may want to consider following Buffett's lead.