FX168 Financial News (North America) News According to the company's latest financial report, as of the end of the second quarter, Berkshire Hathaway held $234.6 billion worth of short-term US Treasury bonds. This is an 81% increase over the $130 billion holdings at the end of 2023.

This figure also exceeds the Federal Reserve's treasury bond holdings. The Fed's short-term treasury bonds as of last week were 195.3 billion US dollars.

Buffett's preference for treasury bonds reflects his inability to find valuable investments that yield more than 5% of the annualized risk-free return on government debt. This has led some to worry that the billionaire investor may have negative feelings about the US stock market. Historically, he chose to raise cash when he found limited investment opportunities, usually due to overvaluation.

Notable data is that the yield on 1-month treasury bonds is 5.33%, 3-month treasury bonds are 5.22%, and 6-month treasury bonds are 4.95%.

These interest rates should bring about $12 billion a year in risk-free returns to Berkshire Hathaway's huge treasury bond holdings, and quarterly earnings of around $3 billion.

At Berkshire Hathaway's annual shareholders' meeting in May, Buffett called treasury bonds “the safest investment.”

Treasury bonds also provide tax benefits to investors because interest payments are exempt from state and local taxes.

Berkshire's bold move in the second quarter went beyond increasing treasury holdings. The company also cut its Apple stock holdings by about half during this period and sold approximately 0.39 billion shares.