Buffett Says "No Worries About US Treasury Despite US Credit Rating Downgrade... Will Keep Buying"

Warren Buffett, chairman of Berkshire Hathaway, known as the "Sage of Omaha," has announced his intention to continue purchasing U.S. Treasury bonds despite Fitch's downgrade of the United States' national credit rating. He explained that this downgrade does not change his view of U.S. Treasuries and the dollar.

[Image source=Reuters Yonhap News]

In an interview with CNBC on the 3rd (local time), Buffett said, "Berkshire bought $10 billion worth of U.S. Treasuries last Monday. This Monday, we also purchased $10 billion." He added that the key question now is whether to buy $10 billion worth of 3-month or 6-month U.S. Treasury bills next Monday. This confirmed his plan to continue investing in U.S. Treasuries. He dismissed concerns by saying, "There are a few things people should not worry about. This (Treasuries) is one of them."

On the afternoon of the 1st, Fitch downgraded the U.S. credit rating from 'AAA' to 'AA+'. This is the first time in 12 years since S&P downgraded the U.S. credit rating in 2011 that a major international credit rating agency has lowered the U.S. rating. Fitch cited political conflicts over raising the federal government’s debt ceiling, fiscal deterioration, and the national debt burden as reasons for the downgrade.

These remarks align with the assessments pouring out from Wall Street following Fitch’s downgrade decision. Jamie Dimon, CEO of JP Morgan Chase, known as the "Emperor of Wall Street," also emphasized the safety of U.S. Treasuries in an interview with CNBC the previous day, saying, "It’s not very important," and "The market decides. It’s not the rating agencies." Global investment banks such as UBS and U.S. Treasury Secretary Janet Yellen also stated, "U.S. Treasuries are the world’s safest assets."

On the same day, Buffett acknowledged the market concerns raised by the sharp drop in the New York Stock Exchange following Fitch’s downgrade, calling them "reasonable," and said, "I do not agree with everything the federal government does." However, he dismissed the idea that this situation is enough to change the view on U.S. Treasuries and the dollar. He emphasized, "Everyone knows the dollar is the world’s reserve currency."