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Danielle DiMartino Booth: When Will Powell Pivot?

Tom welcomes back Danielle DiMartino Booth, CEO and Chief Strategist for Quill Intelligence, a research, and analytics firm.

Danielle discusses the U.S. government’s approach to dealing with inflation which includes raising taxes. Should this administration push forward with these plans then consumers will be hit hardest. These measures aren’t likely to pass until next year assuming the Democratic party doesn’t all but collapse this fall.

She discusses how far astray the current administration and congress have been from following the law. Powell has been sounding quite tough in recent weeks. Had there not been a politically driven Fed leadership crisis rates would probably have been higher. Powell seems more resolute since being re-appointed. It will be interesting to see how far Powell will push the credit markets.

Dealing with supply-side inflation is extremely difficult for the Fed because they simply don’t have the tools. Powell is able if he chooses to break the back of the housing markets. Housing, however, is a lagging measure that will push CPI numbers higher. We’re going to see dis-inflation first in discretionary purchases which will lower monthly CPI prints.

The numbers indicate a global recession will arrive during 2022 which will translate into demand destruction for oil. Energy companies have been reluctant to reinvest profits since they are concerned about potential political risks.

Danielle discusses what Powell may need to see to pivot his approach. Should economic problems become systemic that would likely be the point. She notes that the current Fed is open to a significant decline in equities.

Lastly, she discusses the dynamics of the housing market and notes the intense speculation in these markets. A recession may create a lot of pressure on housing. There is a lot of leverage in the housing markets but they are mostly in the hands of investors. The downside is building for housing. Population growth rates determine the housing needs but right now it looks like we may be in for glut of supply.

Time Stamp References:
0:00 – Introduction
0:46 – Tax Hikes & Inflation
3:27 – Powell Confirmation
7:33 – Easing Inflation?
8:59 – Yearly CPI Numbers
12:30 – Energy Investment
14:14 – Energy Prices & CPI
15:18 – FED Leadership
16:58 – When Powell Pivot?
18:19 – Unemployment Rates?
19:17 – Better Metrics?
20:48 – Equities & Risk
22:00 – Neg. Wealth Effects
23:26 – A Big Question
25:40 – Housing Risks?
28:47 – Supply & Demand
30:15 – Wrap Up

Talking Points From This Episode

  • U.S. administrations’ approach to fixing inflation by raising taxes?
  • What factors will cause Powell to pivot.
  • CPI metrics and why supply-side problems are difficult for the Fed to fix.
  • Housing markets and potential downside factors.

Guest Links:

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 a 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,, 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.

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