Key Takeaways:
- QI Research CEO Danielle DiMartino Booth says the Fed risks a historic policy error by holding rates while Q4 GDP hit 0.5%.
- U.S. consumer spending slowed to a 0.6% rate in early 2026, with 14 consecutive months of negative payroll revisions signaling labor damage.
- The April jobs report and Kevin Warsh’s confirmation battle with Sen. Thom Tillis will determine the Fed’s next policy move.
Precious Metals and Short-Duration Bonds Are Best Bets as Fed Keeps Policy Tight, Danielle DiMartino Booth Says
Danielle DiMartino Booth made the comments in an interview with David Lin on The David Lin Report (TDLR) after headline CPI came in at 3.3% for the month, the highest reading since May 2024, with core CPI rising to 2.6% on the back of higher oil prices.
Federal Open Market Committee meeting minutes released the same day revealed that several members had discussed the possibility of raising interest rates if inflation stayed above target. Booth dismissed any near-term rate hike as politically motivated theater rather than sound economic thinking.
“The idea that the Fed is going to hike rates in this environment is ludicrous,” Booth said. “This is going to go down as one of the biggest policy errors in the history of the Federal Reserve. The Federal Reserve is going to ignore what’s staring them in the face.”
U.S. GDP grew at just 0.5% in the fourth quarter of 2025. Personal consumption, which was running at a 1.9% rate inside that number, has since slowed to 0.6% through January and February 2026, before the full weight of higher gasoline prices hit household budgets. The Atlanta Fed’s GDPNow model projects first-quarter growth of 1.3%.
Booth pointed to the National Bureau of Economic Research’s tracking of personal income after government transfers, which is already showing a recessionary reading. She cited 14 consecutive months of negative payroll revisions and said sell-side economists at major firms have begun using the word recession openly.
The University of Michigan consumer sentiment index hit its lowest reading in survey history. Unemployment expectations printed at 68%, which Booth described as deeply recessionary. A separate measure tracking whether it is a good time to buy a house has collapsed.
Powell’s Extended Podium
On the question of Fed leadership, Booth said Jerome Powell is likely to remain at the podium longer than the White House expects. She pointed to Sen. Thom Tillis, who does not leave office until Jan. 3, 2027, as the obstacle blocking Kevin Warsh‘s confirmation from even reaching a committee vote. Criminal charges against Powell remain unresolved, and Booth said every Fed official will use hawkish posturing as cover until that changes.
“Until criminal charges against Jerome Powell are dropped, every Federal Reserve official in office today is going to hide behind whatever they can to justify staying in a hawkish stance and threatening to raise rates,” Booth said. “Period.”
CME Fedwatch data showed no probability of a rate cut through late April, with meaningful odds not appearing until the December meeting. Booth said the correct policy response would be for the Fed to publicly stand with workers being squeezed by fuel costs, wage disinflation, and rising layoffs, even if rate cuts produce limited relief.
The 30-year fixed mortgage rate eased slightly to 6.37% after five consecutive weeks of increases. The 10-year Treasury yield fell from 4.35% to 4.31% during the week, a move Booth said reflects markets pricing a growth shock more than an inflation threat.
For investors, Booth recommended the short end of the yield curve as the best position ahead of an eventual Fed policy reversal. She said precious metals have found a floor and remain a credible hedge against credit events, financial instability, and inflation. She maintained her view that Chevron’s dividend remains safe.
The April payroll report is the next major data point Booth is watching, given that the March jobs report was boosted by seasonal adjustment anomalies, including 79,000 workers counted as weather-affected and 100,000 jobs added via the birth-death model adjustment.
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