URGENT UPDATE: Warren Buffett has raised alarms over the current state of U.S. fiscal policy, highlighting it as a pressing concern during the 2025 Berkshire Hathaway annual shareholder meeting. As U.S. stocks trade at record-high valuations, the billionaire investor is increasingly alarmed by the country’s growing fiscal deficit, which stands at a staggering $1.8 trillion.
Buffett’s investment firm, Berkshire Hathaway, has been a net seller of U.S. stocks for the past three years. This strategy reflects Buffett’s unease in a market where many investors are fixated on a potential AI bubble. However, he has made it clear that his primary worry is the unsustainable fiscal policies in the United States.
The U.S. government has run a fiscal deficit every year since 2002, and the situation has only worsened. In the 2024/25 tax year, the UK reported a deficit of £148.3 billion, but the U.S. figures are far more alarming. With interest rates recently rising, the reliance on debt is becoming untenable, putting pressure on national budgets primarily to cover interest payments.
“Fiscal policy is what scares me in the United States,” Buffett stated, emphasizing the need for immediate action.
The implications of Buffett’s warning are significant. As the federal government faces the choice between cutting public spending or raising taxes—both politically unpopular options—the economic landscape remains uncertain. This ongoing dilemma raises questions about the stability of the U.S. economy and could lead investors to rethink their strategies.
Despite his caution regarding fiscal policy, Buffett has not entirely withdrawn from U.S. investments. Recently, Berkshire Hathaway increased its stake in Domino’s Pizza (NASDAQ: DPZ), demonstrating his belief that there are still opportunities in the U.S. market. Domino’s, while grappling with softening demand similar to its UK counterpart, possesses a technological edge that sets it apart from competitors like Papa John’s and Pizza Hut.
As food inflation continues to pressure profit margins, Buffett’s confidence in Domino’s suggests he sees value where others may not. His actions prompt investors to consider whether there are undervalued stocks worth exploring, even amid macroeconomic concerns.
What’s next? Investors should closely monitor the fiscal policy debate and how it may affect the stock market. Buffett’s insights could lead to a reevaluation of fiscal responsibility and its impact on investment strategies moving forward.
As the world’s most renowned investor shares his thoughts, the urgency for change and prudent financial strategies is palpable. Stay tuned for further developments as the market reacts to these critical warnings from Warren Buffett.
