FLASH @DeItaone: TRUMP LASHES OUT AT FED AFTER WARSH BACKS 25BP HIKE TO 3.75%–4.00%

Fed Rate Shock & Market Impact Simulator

Simulate macroeconomic divergence between Chairman Kevin Warsh's enacted 25bp rate hike (3.75%–4.00%) and President Trump's demand for 1.00% rates. Adjust policy trajectory to view yield curve re-pricing, debt refinancing strains, and equity sensitivity.

POLICY TRAJECTORY LEVER FED FUNDS
Simulated Policy Target: 4.00%
0.50% 1.00% (Trump) 4.00% (Warsh) 6.00%
Benchmark Policy Presets:
Federal Reserve Chair: Kevin Warsh
Recent Decision: Unanimous +25bp (3.75%–4.00%)
White House Stance: Demands 1.00% or lower
Board Sentiment: "Very Hostile"
Policy Spread vs Trump: +300 bps
EXECUTIVE MEMORANDUM
Loading baseline scenario...
U.S. TREASURY YIELD CURVE DYNAMICS STATUS: FLAT / MILD INVERSION
Pre-Decision Baseline (3.75%)
Enacted Warsh Curve (4.00%)
Simulated Yield Curve
CROSS-ASSET IMPACT MATRIX CALCULATED RESPONSE
S&P 500 Reaction
-1.80%
-92 Pts
2-Year Treasury
4.15%
+22 bps
10-Year Treasury
4.35%
+12 bps
30-Yr Fixed Mortgage
6.85%
+$165/mo
BORROWING & DEBT SERVICE BURDEN $36.2T DEBT
ANNUAL U.S. DEBT INTEREST EXPENSE
Roll-Over Refinance Rate: 4.20%
Projected Annual Net Interest: $1,142B
Variance vs Trump 1.00% Demanded: +$740B / yr
PRIVATE SECTOR BORROWING STRAIN
Investment Grade Spread: 5.25% (+115bp)
High Yield (Junk) Refi: 7.80% (+375bp)
Commercial Real Estate Cap Rate: 6.45%
KEY CONFLICT TAKEAWAY

Chair Kevin Warsh prioritizes inflation discipline and institutional credibility via unanimous hike, while President Trump warns of soaring national debt service and tightening liquidity.

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