SUMMARY
- Warren Buffett untroubled by Fitch's downgrade, continues to back his conglomerate's operations.
- Fitch's U.S. downgrade triggered a stock sell-off, causing the S&P 500 to dip 1.4%.
- Despite concerns, Buffett maintains belief in U.S. Treasurys and the global reserve status of the U.S. dollar.
The renowned investor, Warren Buffett, appears unperturbed by Fitch's recent downgrade of the U.S. He has confidently expressed that such adjustments do not derail the ongoing operations of his investment conglomerate, Berkshire Hathaway.
"Regardless of the downgrade, Berkshire has persistently purchased U.S. Treasurys, laying down a cool $10 billion, week after week. The upcoming investment decision merely boils down to whether we invest in the 3-month or 6-month T-bills," Buffett informed Becky Quick of CNBC. He further added, "There are certain things that should not add to the population's anxiety, this, I believe, is one of them."
Just this Tuesday, Fitch made the move to downgrade its long-term foreign currency issuer default rating for the U.S. from AAA to AA+. This decision was driven by the anticipation of fiscal decline in the coming three years, escalating debt, and weakening governance.
This downgrade unsurprisingly triggered a sell-off in the U.S. stocks market, resulting in a 1.4% dip in the S&P 500 on Wednesday. Despite acknowledging these legitimate concerns, Buffett—often dubbed the 'Oracle of Omaha'—articulated that these are not grave enough to transform his beliefs about U.S. Treasurys and the dollar.
In a reassuring tone, Buffett concluded, "The dollar, undeniably, is the world's reserve currency, and there's a universal consensus on this."
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