- Elon Musk called short-term Treasurys a “no brainer,” mirroring Warren Buffett’s and Bill Ackman’s views.
- Tesla’s CEO replied to Ackman when he said that he invests cash in short-term Treasury bills like Buffett.
- This year, short-term US bonds have offered better returns than longer-term bonds.
Elon Musk praised short-term Treasurys, calling them a “no brainer,” echoing views held by Bill Ackman and Warren Buffett.
Tesla and SpaceX’s CEO was replying to a Post on XAckman, like Buffett, has said that he invests cash in short-term Treasurys.
“We are actually in agreement.” Buffett would not buy Treasury 30-year bonds at current yields. His purchases are a cash management strategy using short-term T bills. Ackman added, “We also invest our money in short term Treasurys.”
Musk responded, “Yes, T-bills for short-term are an easy choice.”
T-bills, or short-term US government bonds, mature in a shorter period than notes or bonds. They usually last between four and 52 weeks.
Short-term US debt yields have surged this year, with short-dated T-bills offering better returns than long-term bonds – also known as an inverted yield curve.
The situation is largely due to the Federal Reserve’s aggressive interest rate rises, increasing borrowing costs by 500 basis points since March 2022.
Musk’s and Ackman’s posts came a day after Berkshire Hathaway’s CEO stated that his company is in trouble. Still buying $10 Billion of US Treasuries every Monday despite Fitch’s surprise cut to the US’s credit rating.
Buffett said that there are some things about which people need not be concerned. CNBC. “This is it,” he continued, referring to Fitch downgrading the US’ credit rating from AAA (the highest) to AA+.
Ackman revealed Thursday that he is a fan of short-term Treasurys. Short on 30-year US Treasurys.
Pershing Square’s chief executive said that his bearish prediction acts as a hedge to offset the effects of higher interest rates and is a “high-probability standalone bet.”
