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Buffett Unfazed By U.S. Rating Downgrade, Continues $10 Billion Treasury Buying Spree

Berkshire Hathaway CEO remains confident in Treasuries as equities plunge and bond yields spike

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.

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.

Billionaire investor Warren Buffett, Chairman and CEO of Berkshire Hathaway Inc, joins California Governor Arnold Schwarzenegger (not in picture) in a coversation during the Women’s Conference 2008 at the Long Beach Convention Centre in Long Beach, California, on October 22, 2008. Some 14000 women were attending the nation’s premier forum for women. 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. PHOTO BY JEWEL SAMAD/GETTY IMAGES

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.

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.

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.

Billionaire investor Warren Buffett, Chairman and CEO of Berkshire Hathaway Inc, joins California Governor Arnold Schwarzenegger (not in picture) in a coversation during the Women’s Conference 2008 at the Long Beach Convention Centre in Long Beach, California, on October 22, 2008. Some 14000 women were attending the nation’s premier forum for women. 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. PHOTO BY JEWEL SAMAD/GETTY IMAGES

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 31st showed that the company’s investments in short-term Treasuries stood at $103.89 billion.

Produced in association with Benzinga

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