Warren Buffett's Berkshire Hathaway now owns more short-term Treasurys than the Fed

Berkshire Hathaway stands to gain about $12 billion in annual interest from its $235 billion in T-Bill holdings.

• Berkshire Hathaway now holds more short-term Treasurys than the Federal Reserve.
• The firm increased its holdings by 81% year-to-date through June, now owning $234.6 billion.
• It's on track to generate annual risk-free interest of about $12 billion.

Warren Buffett's Berkshire Hathaway now owns more short-term Treasurys than the Federal Reserve.

The company held $234.6 billion in short-term US Treasury Bills at the end of the second quarter, according to its latest earnings release. That's up 81% from the roughly $130 billion it owned at the end of 2023.

It also eclipses the Federal Reserve's T-bill holdings, which stood at $195.3 billion as of last week.

Buffett's preference for Treasurys is reflective of him being unable to find worthy investments that exceed the more-than-5% annualized risk-free offered by government debt. It has some worried that the billionaire investor has soured on the US stock market. He has historically raised cash when he sees few attractive opportunities to invest due to elevated valuations.

For context, the 1-month T-Bill yields 5.33%, the 3-month T-Bill at 5.22%, and the 6-month T-Bill at 4.95%.

Those interest rates should generate risk-free gains of about $12 billion annually for Berkshire Hathaway's massive T-Bill holdings, or quarterly gains of about $3 billion.

At Berkshire Hathaway's annual shareholder meeting in May, Buffett called T-Bills "the safest investment there is."

Treasury bills also offer their investors tax incentives, as the interest paid is exempt from state and local taxes.

The Treasury additions weren't the only bold move by Berkshire in the second quarter. The company also cut its stake in Apple stock by about half during the period, selling about 390 million shares.