QE's role: liquidity band-aid versus solvency backstop

Tom Bodrovics welcomes Danielle DiMartino Booth, CEO and Chief Strategist for QI Research, to discuss the latest economic developments and the Federal Reserve’s role. The conversation begins with the recent Fed Minutes, which reiterated a hawkish stance and coincided with the cancellation of the October payrolls report, providing the Fed with an excuse to delay rate cuts. DiMartino Booth suggests that the Trump administration’s actions, such as proposing a $2000 tariff rebate, have been met with resistance from Congress due to concerns about inflation. She also highlights the recent surge in layoff announcements from major corporations, attributing it to a combination of overhiring during the pandemic and the current economic downturn.

Timestamps:
00:00:00 – Introduction
00:00:27 – Fed Minutes Analysis
00:01:28 – Government Shutdown Data
00:02:43 – Scott Bessent Challenges
00:04:49 – Stimulus Checks Critique
00:05:15 – Corporate Layoff Trends
00:07:55 – Fed Data Manipulation
00:10:46 – Fed Politicization History
00:12:55 – Fed Leadership Candidates
00:14:40 – Stacking Fed Reserves
00:16:46 – Repo Rate Spike
00:21:08 – Personal Finance Advice
00:23:17 – Wrap Up

Tom then shifts to the politicization of the Fed, with DiMartino Booth arguing that the institution has become more overtly political in its policymaking. She criticizes the Fed’s use of data as a “weapon of mass destruction” to serve its needs and calls for more accountability. DiMartino Booth also expresses concern about the Fed’s handling of liquidity issues, noting that the recent repo rate spike signals potential problems ahead. She suggests that the Fed may need to provide more liquidity to the system, but cautions that this could exacerbate existing bubbles in the equity markets.

Guest Links:
X: https://x.com/DiMartinoBooth
Substack: https://dimartinobooth.substack.com/
Website: https://quillintelligence.com/
YouTube: https://www.youtube.com/c/DanielleDiMartinoBoothQI

Danielle DiMartino Booth is CEO and Chief Strategist for Quill Intelligence LLC, a research and analytics firm.

DiMartino Booth set out to launch a Research Revolution, 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.