Buffett and Ackman take opposing sides on Treasury yields — What does it mean for Bitcoin?

Warren Buffett and Bill Ackman are two of the most successful investors in the world, but they have taken opposing views on the bond market in recent months.

Only one can be right. Billionaire investor Bill Ackman says he is shorting US Treasuries. if long-term inflation is 3% not 2%, the 30y Treasury yield could rise to 5.5%. In contrast, Warren Buffett has announced buying positions in 10y US Treasuries. Shorting US 10y bonds seems… pic.twitter.com/X2zSPzJ91Y

— Holger Zschaepitz (@Schuldensuehner) August 5, 2023

Buffett has been buying short-term Treasury bills, while Ackman has been shorting long-term Treasury bonds. Could both of these investors be right?

Warren Buffett is the chairman and CEO of Berkshire Hathaway, one of the world’s largest investment holding companies. Buffett’s worth is estimated to be over $100 billion. Bill Ackman is an American hedge fund manager, activist investor and the founder and CEO of Pershing Square Capital Management, a hedge fund with over $20 billion in assets under management.

There is the possibility that short-term and long-term interest rates will move in different directions. For example, if the Federal Reserve raises short-term rates in an effort to combat inflation, long-term rates could fall. This would be good for Buffett, who is buying short-term bonds, but bad for Ackman, who is shorting long-term bonds.

Another possibility is that Buffett and Ackman are simply taking different views on the risk of inflation. Buffett believes that inflation is not a major threat, and that short-term Treasury bills offer a safe haven from market volatility. Ackman, on the other hand, believes that inflation is a serious risk, and that long-term Treasury bonds are overvalued.

Buffett and Ackman will both probably get what they want

There is a possibility that Buffett and Ackman are both right, at least in the short term. Meaning, it is possible that short-term rates will rise while long-term rates fall. This would happen if the Federal Reserve raises interest rates in an effort to combat inflation, but the market does not believe that the Fed will be able to raise rates enough to significantly slow down inflation.

In this scenario, Buffett would benefit from his short-term Treasury bill investment, while Ackman would benefit from his short position on long-term Treasury bonds. This possibility is supported by the fact that the…