Elon Musk touts short-term Treasurys as a 'no-brainer,' echoing Warren Buffett and Bill Ackman
Jonathan Ernst/Reuters
- Elon Musk touted short-term Treasurys as a "no-brainer," mirroring Warren Buffett and Bill Ackman.
- The Tesla CEO responded to Ackman, who said he's investing cash in short-term T-bills like Buffett.
- Short-term US debt yields have jumped this year, offering better returns than long-term bonds.
Elon Musk touted short-term Treasurys as a "no-brainer," echoing the views of Warren Buffett and Bill Ackman.
The Tesla and SpaceX CEO was responding to a post on X by Ackman, who like Buffett, said he puts cash into short-term Treasurys.
"We actually agree. Buffett would never buy 30-year Treasurys at anywhere near current yields. His purchases are just cash management using short-term T-bills. We also invest our cash in short term Treasurys," Ackman said.
"Yeah, short term T-bills are a no-brainer," Musk replied.
T-bills are short-term US government debt securities that mature over a period of four to 52 weeks, less than bonds or notes.
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.
Both Musk and Ackman's posts come a day after the Berkshire Hathaway CEO said his company is still buying $10 billion of US Treasuries every Monday despite Fitch's surprise cut to the US's credit rating.
"There are some things people shouldn't worry about," Buffett told CNBC. "This is one," he added, referring to Fitch's downgrade of the US credit rating from AAA to AA+.
At the same time, while Ackman reveals his fondness for short-term Treasurys, he revealed on Thursday he's short on 30-year US Treasurys.
The Pershing Square chief said his bearish call acts as a hedge against the impact of higher interest rates on stocks, and as a "high probability standalone bet."