Danielle DiMartino Booth: Special Fed Minutes Review – The Credit Cycle Has Come Unglued
Tom welcomes back Danielle DiMartino Booth, she is CEO and Chief Strategist for Quill Intelligence, a research and analytics firm. Danielle has a new offering on the Substack she recently started.
Tom and Danielle discuss the recently released Fed Minutes and the potential implications for the US economy. DiMartino Booth stated that the minutes were massaged in order to correct any market misperceptions that the Fed was going to pause its tight monetary policy. She also points out that jobs were not mentioned in the minutes, even though bankruptcies and job losses are on the rise, and that consumer credit card debt had jumped to an all-time high. DiMartino Booth argues that the Fed was trying to hide behind specious inflation and jobs data in order to keep up its tight policy stance, and she notes that income tax refunds were down 14% year-over-year.
They also discussed the debt limit issue, which DiMartino Booth describes as kabuki theater, but argued that it should still be a topic of discussion in order to address entitlement spending.
Lastly, DiMartino Booth discusses the recent nomination of Austin Goolsbee to the Chicago Fed and the White House’s subsequent appointment of two more candidates after the leaked voting result against Goolsbee. This, she argued, was a victory for the hawks on the Fed and a loss for the White House. She also highlighted the recalculation of CPI, which she believes will help the Fed when it eventually eases its policy.
Danielle discusse the Fed’s minutes from the last meeting which just came out. What is interesting is what is missing from the notes, namely labor and disinflation.
Time Stamp References:
0:00 – Introduction
0:42 – Minutes Review
2:16 – Labor, Debt & Bankruptcies
7:23 – Monetary Policy Lag
10:30 – Financial Conditions?
12:04 – Debt Limit Theatrics?
15:26 – Feds Path Forward
18:50 – CPI Adjustments
20:16 – Wrap Up
Talking Points From This Episode
- Review of the Fed’s minutes from their last meeting and what was missing.
- Fed acknowledging the lag time of policy decisions to effect and seasonal CPI adjustments.
- U.S. debt ceiling limits and why it’s entirely theater.
Danielle DiMartino Booth is CEO and Chief Strategist for Quill Intelligence LLC, a research and analytics firm.
DiMartino Booth set out to launch a #ResearchRevolution, redefining how market intelligence is conceived and delivered, with the goal of not only guiding portfolio managers but promoting financial literacy. To build QI, she brought together a core team of investing veterans in analyzing the trends and providing critical analysis of what drives the markets.
Since its inception, commentary and data from DiMartino Booth’s The Daily Feather have appeared in other financial sources such as Bloomberg, CNBC, Fox Business, Institutional Investor, Yahoo Finance, The Wall Street Journal, MarketWatch, Seeking Alpha, TD Ameritrade, TheStreet.com, and more.
A global thought leader on monetary policy, economics, and finance, DiMartino Booth founded Quill Intelligence in 2018. She is the author of FED UP: An Insider’s Take on Why the Federal Reserve is Bad for America (Portfolio, Feb 2017), a full-time columnist for Bloomberg View, a business speaker, and a commentator frequently featured on CNBC, Bloomberg, Fox News, Fox Business News, BNN Bloomberg, Yahoo Finance and other major media outlets.
Before Quill, DiMartino Booth spent nine years at the Federal Reserve Bank of Dallas, serving as Advisor to President Richard W. Fisher throughout the financial crisis until his retirement in 2015. Her work at the Fed focused on financial stability and the efficacy of unconventional monetary policy.
DiMartino Booth began her career in New York at Credit Suisse and Donaldson, Lufkin & Jenrette, where she worked in the fixed income, public equity, and private equity markets. DiMartino Booth earned her BBA as a College of Business Scholar at the University of Texas at San Antonio. She holds an MBA in Finance and International Business from the University of Texas at Austin and an MS in Journalism from Columbia University.