Warren Buffett now owns more T-bills than the Federal Reserve

In the first half of the year, Berkshire Hathaway purchased $229.5 billion in Treasury bills (T-bills) and fixed maturity securities, surpassing the Federal Reserve’s holdings of $195.3 billion in these bills, according to the Fed’s report last week.

Warren Buffett, a long-time advocate of T-bills, praised them at the annual Berkshire conference in May, describing them as “the safest investment there is.”

T-bills are short-term securities issued and backed by the U.S. government, with maturities ranging from four to 52 weeks and a minimum purchase amount of $100. They appreciate in value to their full face value upon maturity.

While T-bills typically offer lower returns compared to riskier investments like stocks, the current interest rate environment, with rates between 5.25% and 5.5%, has boosted their yields. As of August 2, three-month T-bills offer a 5.05% return, six-month bills yield 4.68%, and 12-month bills provide a 4.18% return.

Berkshire’s earnings report also disclosed that it reduced its stake in Apple to $84.2 billion from $174.3 billion at the beginning of the year. This marks the third consecutive quarter of reducing its Apple holdings. Despite this, Apple remains Berkshire’s largest stock investment, followed by Bank of America Corporation ($41.1 billion) and American Express Company ($35.1 billion) as of June 30. Additionally, Buffett sold nearly $4 billion worth of Bank of America stock over a 12-day period last month.

With these substantial stock sales totaling around $75 billion, the “Oracle of Omaha” increased his cash reserves to a record $276.9 billion last quarter, as indicated by the filing.