Buffett Surpasses Fed in T-Bills Holdings

Omaha-based conglomerate Berkshire Hathaway reported significant financial maneuvers in its quarterly financial report, revealing $234.6 billion in short-term investments in Treasury bills and over $42 billion in cash and cash equivalents. This includes T-bills with maturities of three months or less, highlighting the company's strategic shift towards safer assets amid economic volatility. The report also noted that Berkshire Hathaway has been divesting from stocks for seven consecutive quarters, with a notable acceleration in the second quarter where CEO Warren Buffett sold more than $75 billion in equities. This trend has raised concerns among investors, as many interpret Buffett's actions as a bearish outlook on the economy and market conditions. Buffett has historically favored Treasury bills during economic downturns, often purchasing them directly at auction. With current yields on three-month Treasury bills around 5%, Berkshire's substantial cash reserves could yield approximately $10 billion annually, underscoring the potential profitability of this conservative investment strategy. In the broader economic context, the Federal Reserve has been actively managing its asset holdings since June 2022 through a process known as quantitative tightening, aimed at promoting maximum employment and stable prices. This includes the sale of Treasury securities to regulate the money supply and interest rates, a move that reflects ongoing efforts to stabilize the economy post-pandemic.