The David Lin Report Fed's Latest Surprise Will Shock Economy | Danielle DiMartino Booth
Oct 30, 2025
Danielle DiMartino Booth, CEO of QI Research and a monetary policy expert, shares her insights on the recent rate cut by the Fed and its implications for the economy and markets. She discusses the likelihood of another rate cut by December, the influence of the government shutdown on policy-making, and how AI investments might alter interest rate sensitivity. Danielle also highlights rising layoffs and the fragile labor market, warning of looming recession risks while cautioning about the potential effects on gold and the dollar.
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Rely On Private Data During Shutdowns
- Use alternative private data when official data is impaired by a shutdown to avoid policy by anecdote.
- Slow policy adjustments if incoming data are scarce, as Powell suggested with the fog driving analogy.
Headlines Can Shape Fed Caution
- Powell can use headlines like large layoffs to justify caution on cuts and pressure Congress politically.
- Markets and Fed behavior are becoming entwined with political incentives according to DiMartino Booth.
Balance Sheet Runoff Ends In December
- The Fed will stop rolling off treasuries after November and will replace maturing Treasuries to maintain balance-sheet size.
- Mortgage-backed security rolloffs could be reinvested into Treasuries, effectively stopping quantitative tightening.