The Fed Is Starting To Fear Recession | Danielle DiMartino Booth

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**Danielle DiMartino Booth** (1:00)
I am certainly not the, in fact, I'm probably not even the first person who's parsing these kind of arcane Bureau of Labor Statistics quarterly census of employment and wages and benchmarks and bed analyses and state level payrolls. That's the job primarily of Fed staffers, and I'm sure they've been crunching the numbers and doing all the research and that their heads may be more bruised than mine.

**Adam Taggart** (1:38)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. Suddenly, the Federal Reserve is filled with more drama and curve balls than a World Series tiebreaker. The betting markets are abuzz debating who President Trump will replace current chair Jerome Powell with. A surprise resignation from Fed Governor and FOMC voting member Adriana Kugler has added Trump loyalist Stephen Mirran to the inner circle. And another FOMC voting member, Governor Lisa Cook, is now in the crosshairs due to a purported mortgage fraud scandal and is at risk of being replaced. On top of all that, Jerome Powell gave a significant indication in his speech at Jackson Hole last week that rate cuts are indeed coming ahead likely starting next month due to rising concerns at the Fed that the economy, labor force and housing market are weaker than it previously appreciated. To make sense of all this for us and the likely implications, we're fortunate to welcome back to the program, Danielle DiMartino Booth, CEO and Chief Strategist for QI Research and author of the book, Fed Up, An Insider's Take on Why the Federal Reserve is Bad for America. Danielle, thanks so much for joining us today.

**Danielle DiMartino Booth** (2:52)
It's great to be here, Adam. I'm happy that some of the dust has settled on Jackson Hole. But from what I heard from participants, it was not all about light and airy and conviviality this year. It was a little more tense.

**Adam Taggart** (3:09)
Okay. Well, why don't we start there with Jackson Hole? Pelgate up there, interestingly, kind of delivered exactly what the market had been hoping for and really honestly, I thought had been pricing in. But clearly not because we had a bonkers day in the markets on Friday. Pretty much every asset class everywhere was up dramatically.
Selling off a little bit here at the start of this new week. But he did mention in his remarks that the economy was weakening faster than the Fed thought it was earlier in the year and more or less gave the impression that he's going to start cutting rates next month. So how material is it that he is acknowledging that the economy is now not as rosy as he's sort of been saying it is in all of his press conferences so far this year?

**Danielle DiMartino Booth** (4:06)
I think it's, I don't think it's what you would consider to be kind of this 100% pivot.
But at least it's an acknowledgement of the reality that so many others have been seeing, that it was almost a relief that he said anything at all. There was a lot of fear going in, that he was just going to be just to stand on his principles and insist that the labor market was solid and come what may. And it was just refreshing to see a tiny, just a tiny little hint of reality enter his narrative. For any number of reasons. I mean, Adam, I've been banging my head up against this wall for some time now.

**Adam Taggart** (4:51)
Well, I know you have, yeah. So it's going to feel good to you to see some validation there.

**Danielle DiMartino Booth** (4:55)
Yeah. I mean, look, there are so many, I am certainly not the, in fact, I'm probably not even the first person who's parsing these, these kind of arcane Bureau of Labor Statistics, quarterly census of employment and wages and benchmarks and bed analyses and state level payrolls. That's the job primarily of Fed staffers. And I'm sure they've been crunching the numbers and doing all the research and that their heads may be more bruised than mine.