Bankruptcies Soar 64%: Fed Just Lit A Fuse Danielle DiMartino Booth

David Lin (0:00)

This is a policy mistake to raise rates right now.

Danielle DiMartino Booth (0:02)

You cannot squeeze blood from a rock, which I repeat endlessly, with deference to Cher Warsh. Yes, diesel prices, if American paychecks were growing on an inflation-adjusted basis, yes, diesel prices would trickle down through to higher prices that could be stickier. They have to be more aggressive in their easing. They have to be more aggressive in cutting rates to try and catch a falling knife.

David Lin (0:23)

We're back now with Danielle DiMartino Booth, CEO of QI Research. Welcome back, Danielle. It's Tuesday, September 22nd. Stocks were rallying the day before, yesterday on Monday, and the bond yields were falling. Today, things look like they're stabilizing. Anyway, I'll get your take on the bond market, the economy, and your latest research at QI Research. I want to play for you what's happening this morning, or what happened this morning, which is Trump making a speech at the UN. I have to bring it up because it's current.

But he made a number of important, or rather, rather important statements that I like you to address.

SPEAKER_3 (0:57)

Now we must be equally united in maintaining pressure. The United States Navy has recently escorted more than one billion barrels of oil out of the Strait of Hormuz. And more oil is flowing than at any point since the start of the war. We're taking 22, 25, 30, 32, and 37 ships out, respectively, every single day, every single night. But I have a big decision to make.

Will a deal be made with Iran that lets them rebuild and create a far greater country than it ever was before? Maybe one of the greatest in the Middle East or even the world?

Or do I annihilate the Islamic Republic and do it quickly, never giving them a chance to kill and destroy people and countries again? Do I drive them into hell with no chance of survival and no hope of future greatness or generations? But I believe we'll make a deal right after the election because it doesn't make sense for them not to. They're waiting to see how I do in the midterm election.

David Lin (2:12)

I believe we'll make a deal with Iran after the election.

He said he's poised to make a big decision on whether or not to make a deal quickly or annihilate the country. And then he said he's going to make a deal right after the November 3rd midterm elections. It's speculated as to whether or not he'll be talking with the president of Iran this week at the UN General Assembly.

But from reports that I've seen, I haven't seen that yet. Oil fell on this anticipation. And this, of course, if it were to happen, would have huge ramifications for not only the bond market, but also oil and also the economy. Do you think he's bluffing at this point? Because we've heard this a lot.

Danielle DiMartino Booth (2:50)

Well, David, to your point, we have heard this a lot, so it's very difficult to say if this is going to be the real deal. I mean, on a more fundamental level, I would ask a simpler question. This would provide great relief to countless US households and, in fact, worldwide households if oil prices were to come down. So why wait?

I mean, that's my question.

David Lin (3:16)

Why wait for what?

Danielle DiMartino Booth (3:17)

Why wait for the midterms to come and go? Why not bring voters the good news before they go to the polls?

David Lin (3:24)

That's a good question, good rhetorical question. I mean, I can only surmise that maybe they need time to negotiate, but I don't know.

Danielle DiMartino Booth (3:35)

It seems like it's a constant negotiation, and as soon as the speech ended, Iran came back and said, we're going to be curtailing traffic through the state of Hormuz again. So it's this constant back and forth, but I think that what voters want before the midterms is some kind of assurance about their cost of living improving.

David Lin (3:55)

Danielle, do we have an economy that is able to withstand inflation or higher inflation from oil, which is what happened in the last one month oil has spiked, as well as distillate products like diesel and the Fed now raising rates?

Danielle DiMartino Booth (4:12)

So I think that you're finding the economy at a very fragile juncture here.

There was an interesting report out this morning from Challenger Gray and Christmas that showed that as bad as 2025 hiring was for the holiday season, they fully anticipate, given what companies have announced thus far, that there's going to be even less hiring in retail, that this holiday season is going to be even weaker. So it's clear if you're looking at what companies are doing, as opposed to what they're saying, that the US household right now is in a very precarious situation. The cost of not just gas prices, but food and their utility bills, they're all rising.