The David Lin Report Did Fed Doom The Economy? What 'Policy Error' Means For Jobs, Home Prices | Danielle DiMartino Booth
Jul 30, 2025
Danielle DiMartino Booth, a former insider at the Federal Reserve and CEO of QI Research, offers a critical view on the Fed's monetary policy amid a cooling labor market. She discusses alarmingly low job openings and business investments, predicting possible economic downturns. Booth warns that the Fed's decisions, including keeping interest rates unchanged, could lead to a recession. She also highlights the struggles of first-time homebuyers against rising prices and the broader implications for the housing market.
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Fragile Labor Market and Investment Decline
- The labor market is more fragile than official reports suggest, with layoffs due to AI and offshoring increasing.
- Business investment has sharply declined, a consistent precursor to recessions historically.
Disinflation Signals and Policy Risk
- Inflation is effectively negative when adjusting for key rent indexes, signaling strong disinflation.
- Current Fed policies risk overtightening amid mounting disinflationary forces.
Fed Divisions Over Rate Policy
- The Fed's majority views inflation as still too high despite data suggesting otherwise.
- Two FOMC members dissented, favoring rate cuts to adjust to weakening economic signals.