Why Buffett's Berkshire Holds More Treasuries Than the Fed

Understanding the Significance of Berkshire Hathaway's Treasury Bill Holdings

Warren Buffett’s Berkshire Hathaway Inc. (BRK.A, BRK.B) has emerged as a major player in the U.S. Treasury bill market. As of the end of the first quarter of 2025, the company held approximately $314 billion in T-bills, surpassing even the Federal Reserve’s holdings. This shift highlights Buffett’s strategic approach to investing during uncertain economic times.

Key Takeaways

• Berkshire Hathaway holds about $314 billion in U.S. Treasury bills, which is more than the Federal Reserve’s $195 billion stake.
• With the average T-bill yielding over 4% as of July 2025, Berkshire stands to earn billions in income with minimal risk.
• The company is waiting for the right opportunity to make large investments, leveraging its cash reserves effectively.

What Are Treasury Bills and Why Do They Matter?

Treasury bills, or T-bills, are short-term debt securities issued by the U.S. government. They have maturities ranging from four weeks to one year. These instruments do not pay periodic interest but are sold at a discount, with investors receiving the full face value at maturity. The difference between the purchase price and the face value represents the return on investment.

T-bills are considered among the safest investments globally because they are backed by the full faith and credit of the U.S. government. They are particularly favored for managing large cash reserves due to their ease of purchase and sale, as well as their negligible default risk.

Berkshire Hathaway’s Treasury Bill Holdings vs. the Federal Reserve's

As of the end of the first quarter of 2025, Berkshire Hathaway’s filings revealed $314 billion in T-bills, accounting for about 5% of the $6.15 trillion T-bill market. This represents a significant increase from the previous year, with over $305 billion of its cash invested in short-term government debt.

In contrast, the U.S. Federal Reserve reported $195.4 billion in U.S. Treasury bills as of July 2025. The Fed has been reducing its T-bill holdings as part of its balance sheet runoff, focusing more on longer-dated Treasurys and mortgage-backed securities.

Why Is Berkshire Buying So Many Treasury Bills?

Safety and Liquidity

Buffett favors T-bills for their safety and liquidity. With stock markets at elevated valuations and uncertainty surrounding global economic growth, he prefers to be patient while searching for large, attractive acquisitions.

Attractive Yields

Short-term rates remain above 4%, allowing Berkshire to generate billions in interest income annually while taking virtually no credit risk.

Strategic Options

Holding T-bills provides Berkshire with the flexibility to deploy massive amounts of capital quickly when market dislocations or acquisition opportunities arise. Buffett has emphasized the importance of being ready to act decisively when the right deal comes along. As he mentioned at the 2025 annual meeting, “Every now and then, you come across something... We will be inundated with opportunities that we will be grateful we have the cash for.”

Market Conditions

Buffett has cited high asset prices and a lack of compelling acquisition targets as reasons for holding cash and T-bills. He has expressed that “everything’s too expensive,” reinforcing his cautious approach to investing.

Bottom Line

Berkshire’s substantial T-bill position now exceeds that of the Federal Reserve, banks, and many foreign central banks. For investors, this underscores the value of liquidity during uncertain times and the importance of resisting the urge to chase risk when valuations are stretched.