Here We Go! President Donald Trump Just Threw Fed Chair Kevin Warsh Under the Bus Over Interest Rates.

The FOMC voted unanimously 12-0 to raise the federal funds target rate by 25 basis points on Sept. 16, to 3.75%-4.00%, as tariff-related costs and the Iran war’s disruption to the Strait of Hormuz fuel supply add to inflation. U.S. diesel prices were cited at a record $6.527 per gallon, up from $3.688 a year earlier. The article argues that rate cuts may remain off the table until after the war and that persistent inflation could prompt further hikes; Trump criticized the Fed and said Warsh might have voted against the board.

Analysis

The market risk is not the political jab itself; it is that an energy and tariff shock turns a hoped-for easing cycle into a higher-for-longer path. Near term, that reprices the front end and weighs on long-duration equities. Over 1–3 months, watch whether fuel and freight costs pass through into core inflation and expectations: persistent pass-through could keep cuts deferred even as real activity weakens. That mix is adverse for rate-sensitive borrowers and consumer discretionary, but supportive for near-term reinvestment yields at cash-rich businesses. Berkshire Hathaway (BRK.A) is therefore relatively buffered, not a direct inflation hedge: higher yields can help income on cash and insurance assets, while higher discount rates and weaker demand can weigh on its equity portfolio and operating companies.

The less-consensus risk is a credibility premium. Public pressure on the Fed may lift longer-dated term premium even if near-term policy expectations rise, producing a bear-steepening rather than a simple parallel selloff. This is conditional, not established by the article. The political narrative could also reverse quickly if energy disruption eases or inflation data cool; do not extrapolate one policy decision into a durable hiking cycle. Validate with core inflation, inflation expectations, energy/freight prices, and policy-rate pricing. A sustained fall in those measures, or explicit Fed guidance against further tightening, would invalidate the hawkish thesis.

Key Decisions for Investors

• Near-term: favor reducing unhedged long-duration Treasury exposure over making a large outright equity short. Reassess if market pricing for the next several Fed meetings rises alongside sticky core inflation; reverse if inflation expectations and energy costs retreat.
• Consider a tactical short in long-duration Treasuries (for example, TLT) only as a defined-risk expression of higher term premium, not as a pure Fed-hike bet. The key risk is a growth shock or rapid energy-price normalization that drives yields lower; use a pre-set loss limit and monitor long-end yields versus front-end policy pricing.
• Keep BRK.A as a relative-resilience holding rather than a direct rate trade. Its cash reinvestment benefit may be offset by valuation and operating-business exposure; verify reported investment income and operating earnings before attributing a material earnings uplift.
• Watch for bear-steepening confirmation: long-term yields rising faster than front-end rates alongside stable or rising inflation expectations. If instead front-end rates rise while long yields fall and inflation expectations decline, recession risk is dominating and the proposed duration short should be closed.