#308 Danielle DiMartino Booth: Fed Risks Repeating December 2018 Liquidity Crisis With Rate Hold

Danielle DiMartino Booth, CEO and Chief Strategist at QI Research, joins Julia La Roche to break down the FOMC minutes. Danielle discusses the deep divisions within the Federal Reserve and their controversial decision-making heading into December. She argues the Fed is willfully ignoring abundant alternative data sources like ADP's weekly reports while claiming to fly blind without official jobs data—data that won't be released until after their December meeting due to administrative delays. Booth warns that if the Fed doesn't cut rates in December, they risk triggering a liquidity crisis similar to December 2018, when Powell's hawkish stance caused a market bloodbath on Christmas Eve and forced him to reverse course.

This episode is brought to you by VanEck. 

Learn more about the VanEck Rare Earth and Strategic Metals ETF: http://vaneck.com/REMXJulia

Links:    

Danielle's Twitter/X: https://twitter.com/dimartinobooth  

Substack: https://dimartinobooth.substack.com/

YouTube: https://www.youtube.com/@DanielleDiMartinoBoothQI

Fed Up: https://www.amazon.com/Fed-Up-Insiders-Federal-Reserve/dp/0735211655

Timestamps:

0:00 - Introduction & post-FOMC reaction

0:27 - Deep divisions within the Federal Reserve

1:47 - Fed's tone deafness on inflation concerns

2:05 - Politics at the Federal Open Market Committee

3:32 - Alternative data sources: ADP & jobless claims

5:38 - The irony: administration's self-inflicted rate cut problem

6:51 - ADP data: what Powell said vs. what the Fed does

7:32 - Market reaction & Nvidia's impact

8:13 - Should the Fed cut rates in December?

9:39 - Powell's contacts: the willful blindness problem

10:12 - Fed independence vs. politicization

11:28 - The damage of playing politics with monetary policy

13:51 - Treasury yields & market concerns

17:38 - Debt servicing crisis & political implications

26:54 - Private credit & private equity discussions

27:30 - Liquidity crisis warning: emergency rate cut risk

28:44 - Question for Powell?

29:27 - Why an emergency cut may be necessary

31:52 - Closing thoughts