DIASTOLE ECONOMIC AND MARKET COMMENT
September 21, 2026
Warren Buffett continued his slow departure from Berkshire Hathaway last week when he stepped down from his position as chairman of the conglomerate. His son Howard will succeed him as chairman, while Warren moves to chairman emeritus but remains on the board. He appointed Greg Abel to serve as CEO less than a year ago. Warren Buffett is now in his 90s, and has provided a 19.7% compounded annual return to shareholders over his more than 60 years at the helm of BH. That’s almost twice the return of the Standard & Poor’s 500. Berkshire Hathaway class A shares are selling for about $763,600 apiece. Not a typo.
Since 2006, Buffett has donated roughly $66 billion worth of stock to charity. His remaining fortune (currently around $150 billion) will be donated to charity by his three children by the end of 2034.
The Federal Reserve Open Market Committee (FOMC) met last week and voted unanimously to raise interest rates by one quarter of one percent. Everybody anticipated this move because inflation is stalling/rising instead of falling, while the labor market is still solid. That led the FOMC to address inflation while its other mandate (full employment) takes care of itself. Economists now expect at least one more rate hike this year. And while stock markets fell on Wednesday when the rate hike was announced, markets ended the week stronger.
Bond rates rose last week as prices fell. Bond prices and yields move in opposition to each other. The yield on the ten-year Treasury reached and passed 5%, which is a significant psychological level, before sinking again to just below that mark. At 5%, investors begin to wonder if they would be better off selling stocks and buying Treasurys. Also, the ramifications of higher interest rates for borrowers are serious. And who are our biggest borrowers these days? AI hyperscaler companies who are borrowing for construction costs on huge data centers, and even for the costs of outfitting and running the centers.
Meanwhile, the price for American oil has fallen from over $100 per barrel to around $94. Of course, the reduction has not worked its way through to gas prices yet, but one can hope. Farmers are still struggling with the cost of diesel fuel, which drives their big equipment, AND the cost of fertilizer which is expensive and harder to buy because so much of it travels through the Strait of Hormuz.
U.S. consumers have spent approximately $107 billion EXTRA for gasoline and diesel during the war with Iran and disruptions from the Russian war in Ukraine. American oil executives are warning that commercial fuel stocks are depleted and strategic crude reserves are running low. Unfortunately, tax credits and tax breaks for electric vehicles and green energy have been ended. Retail sales rose 1.2% in August – largely due to the higher fuel prices, but also because groceries and shelter continue to rise in price. Standard 30-year mortgage rates are back up around 7%.
Iran has bombed many U.S. facilities in the Mideast, as well as facilities owned and operated by our allies. But now Amazon Web Services (AWS) says it can’t restore some of the data that was lost in the bombing raids at their own data centers in the Persian Gulf. Data stored by AWS in all its data centers in Bahrain, and some of them in the U.A.E. are now unrecoverable. Who has the back-up floppy disks?
For the week ending on September 18th, the S&P 500 finished at 7,647, the Nasdaq Composite at 26,508, and the Dow Jones Industrials at 51,681. The yield on the ten-year Treasury note finished at 4.95%. U.S. crude oil cost $93.50 per barrel, N.Y. gold cost $4,370.10 per ounce, and one Euro was worth $1.15.
Elizabeth E. Cook
Partner, Diastole Wealth Management
News and information presented here were gathered from sources believed, but not guaranteed, to be reliable, including (but not limited to) Barron’s, USA Today, The Wall Street Journal, Axios, Bloomberg, CNBC, Business Insider, Yahoo Finance, and WYNC.If you have questions, please call Diastole at 203.458.5220, or email me, Liz Cook, at ecook@dwinvest.com.
New York City is installing 17 new public restrooms on its sidewalks. Two have arrived already and the rest are coming. The bathrooms are AI powered robotoilets that will require a phone app to use. They look bright and clean (for now) but have one downside: there is a ten-minute time limit and the door will open automatically when time is up. Read that again. You’re in the public toilet, on the sidewalk, and after 10 minutes the door automatically opens up. On the sidewalk. In New York City. Just saying.