Warren Buffett Reveals Why He's Not Worried About Fitch's US Downgrade: 'Only Question For Next Monday Is...'

Author: Shanthi Rexaline | August 03, 2023 08:54am

Billionaire investor Warren Buffett dropped his view on the U.S. rating downgrade by Fitch, in line with what most economists have said in the aftermath of the development.

What Happened: Buffett said he was not worried about it and it's not changing anything that Berkshire Hathaway, Inc. (NYSE:BRK) (NYSE:BRK) is doing right now in the market, CNBC reported on the Squawk Box, citing exclusive comments made to the outlet.

Berkshire bought $10 billion worth of Treasuries on Monday, and the only question for next Monday is “whether we will buy $10 billion in three- or six-month T-bills,” Buffett reportedly said.

The billionaire said it is the safest place to be in and that people shouldn't be worried about it. The concerns raised by Fitch may not be fully invalid, he suggested, adding that he doesn't agree with everything the federal government is doing right now.

See Also: Is Berkshire Hathaway (BRK.A) Stock a Good Buy?

Buffett reiterated that the rating action does not change the way he sees U.S. Treasuries or the dollar. “The dollar is the reserve currency of the world and everybody knows it,” he reportedly said.

Why It's Important: Fitch's downgrade of the long-term rating of the U.S. from AAA to AA+ with a stable outlook was premised on the country's rising fiscal deficits and a steady deterioration in the country's governance.

Reacting to the announcement, equities plunged on Wednesday and bond yields spiked. This is despite economists reassuring that the rating downgrade appeared to be inept at a time the economy is chugging along nicely despite the economic uncertainties.

Berkshire's 10-Q report for the quarter ended March 31^st showed that the company's investments in short-term Treasuries stood at $103.89 billion.

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