Warren Buffett buys Treasuries no matter a downgrade of the US ranking by Fitch

(Bloomberg) — It is enterprise as traditional for Warren Buffett’s Berkshire Hathaway after Fitch’s downgrade of the US.

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Berkshire purchased $10 billion in US Treasury notes final Monday. We purchased $10 billion in Treasury notes on Monday. Buffett mentioned on CNBC that the one query for subsequent Monday is whether or not we purchase $10 billion in 3-month or 6-month Treasury notes. “There are some issues folks should not fear about,” he mentioned. “That is one.”

Fitch downgraded america’ sovereign ranking to AA+ from AAA earlier this week, citing the nation’s rising deficit and growing political brinksmanship across the cyclical efforts wanted to lift the debt ceiling. The timing was proper – lower than 24 hours later, the federal government ramped up quarterly borrowing plans for the primary time in two and a half years.

Whereas the markets reacted reasonably within the wake of the downgrade, long-term Treasurys are poised for his or her worst week this 12 months. That is as a result of the transfer got here concurrently elevated US bond issuance, the Financial institution of Japan’s adjustment on its management of home yields and robust US jobs information harm demand for US debt.

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