Bloomberg Businessweek — September 17, 2025

Episode: "Fed Cuts Rates by Quarter-Point; Powell Cites Weakness in Jobs"

Overview

In this episode, hosts Carol Massar and Tim Stenovec break down the latest Federal Reserve interest rate decision, featuring in-depth analysis by Danielle DiMartino Booth, CEO and Chief Strategist at QI Research and former Dallas Fed advisor. Also featured is California gubernatorial candidate Ethan Penner discussing his reform agenda. Other segments include an exclusive on Tesla’s new door handle design and reporting on a headline-making mortgage controversy involving U.S. officials. The discussions encapsulate key economic, political, and business trends in the U.S., focusing on monetary policy, jobs data, state politics, and company innovation.

1. The Fed's Rate Cut and Labor Market Weakness

Key Discussion Points

• Fed Cuts by 25 Basis Points:
  The Federal Reserve announced a 0.25% rate cut, citing a weakening labor market as a driving factor.

  • Danielle DiMartino Booth argues the cut should have been larger and more proactive.

• Fed Independence & Internal Debate:

  • DiMartino Booth emphasizes that Fed Governor Christopher Waller’s decision to go along with the committee (instead of dissenting) signals the Fed’s commitment to independence, even as data pushed for more aggressive easing.
    • "Waller's own research dictates that we should have been playing catch up because we didn't lower in May, we didn't lower in June or July. Yet he stood with the rest of the committee." — Danielle DiMartino Booth (04:09)

• Labor Market Focus:

  • Waller’s focus on “core private sector job creation,” removing health care and education (traditionally recession-proof), shows a sectoral job loss since April—a warning for the broader economy.
    • "When you net out health care and education...the last time we had a job created in the private sector was April." — DiMartino Booth (03:03)
  • Over 1.4 million full-time jobs lost so far in 2025.
  • Underemployment, especially among recent graduates, is at critical levels, with 77% of the U.S. population living in states with falling job openings.

• Mandates Conflict:

  • DiMartino Booth and Massar discuss the inherent conflict between the Fed’s inflation and employment mandates.
    • "The inflation and employment mandates are inherently conflicting. This was a 1978 tweak to the Federal Reserve Act that completely changed how the Fed operates." — DiMartino Booth (08:10)

• Structural Job Issues vs. Monetary Policy:

  • Hosts question whether deep labor market challenges are truly addressable by Fed rate changes, highlighting the impacts of technological shifts (AI, gig economy) and raising the possibility that fiscal—rather than monetary—solutions are required.

Notable Quotes & Memorable Moments

• "I don't think the Fed right now is very good for the American economy, let's put it that way." — Danielle DiMartino Booth (02:30)
• "Even with inflationary concerns...the Fed should have been lowering rates not just in July, but in June and in May as well." — Danielle DiMartino Booth (02:53)
• “Youth unemployment is at recessionary levels...companies are mired in uncertainty.” — Danielle DiMartino Booth (05:34, 09:41)
• “Should the Fed go back to being only an entity that fights inflation? Absolutely. We should make that happen yesterday.” — DiMartino Booth (08:10)

Timestamps

• 02:30–05:34 — Danielle DiMartino Booth on Fed policy, labor market data
• 06:31–08:37 — Debate on Fed mandates, inflation stickiness
• 09:07–10:09 — Structural issues in labor market; fiscal vs. monetary policy
• 10:37–11:08 — Impact of political uncertainty on business investment

2. California's Gubernatorial Race and Policy Proposals

Key Discussion Points

• Ethan Penner’s Candidacy:

  • Real estate investor Ethan Penner (independent, not aligned with either major party) outlines an agenda focused on economic growth, regulatory reform, and homelessness.

• Tax Reform Plan:

  • Penner proposes eliminating state income and corporate taxes in favor of a 15% consumption tax, while ensuring revenue neutrality or growth.
    • “We will eliminate all state income tax, both corporate and personal...replace all state sales tax...with a single 15% consumption tax.” — Ethan Penner (16:34)
  • The plan would improve California’s Tax Foundation ranking from 49th to 3rd.

• Housing and Regulatory Streamlining:

  • Aims to combat housing shortages by reducing construction costs and streamlining approvals—moving from potentially five years to “five days” (or even 15 minutes) using AI-powered oversight.
    • “There's no reason that we can't use technology intelligently...we can have environmental beauty and environmental soundness and make it easy...to build the units that we actually need.” — Penner (18:32)

• Homelessness Solutions:

  • Advocates for public-private partnerships, modular housing, and stronger accountability in spending, emphasizing a "mandate for change."
    • "We've spent $25 billion in the last...four years, and all that's gotten us is nothing but 25% more homeless." — Penner (19:53)

• Political Independence:

  • Penner emphasizes humility and collaboration with both parties and federal government, distancing himself from political distractions.

Notable Quotes

• “I think that California has been so grossly mismanaged for so long...the quality of life has deteriorated so amazingly.” — Ethan Penner (14:01)
• "I'm not willing to accept that it's hard or impossible to do… if people like you and I don't commit ourselves to positive change, the answer is 100% bad." — Penner (23:04)
• “Fighting with the president of the United States is not in the best interest of the people...I don't need to be the story.” — Penner (26:47)

Timestamps

• 13:35–26:53 — Ethan Penner interview, including tax plan, housing, and politics

3. Tesla’s Door Handle Redesign: Safety & Innovation

Key Discussion Points

• Exclusive Interview:

  • Matt Miller and Hannah Elliott speak with Franz von Holzhausen, Tesla's longtime design chief, about safety-driven redesigns of Tesla’s vehicle door handles.

• Safety Concerns:

  • After reports of first responders struggling to open doors after accidents and regulatory scrutiny (especially in China), Tesla is developing a mechanism that combines electronic and mechanical releases in one intuitive handle.
    • “The muscle memory to go to...what you know is right there. So you just pull a little bit further on the lever and...you have the mechanical release.” — Franz von Holzhausen (30:57)

• Regulatory Response & Engineering Philosophy:

  • Von Holzhausen emphasizes Tesla’s “sensible solution” approach and continued focus on sustainability and affordability.
    • "He's really focused on sustainability...on a better way to travel for more people, for lower income people." — Tim Stenovec (32:43)

Notable Moments

• Revelation that von Holzhausen is a Connecticut native, not German as his name might suggest (33:54).

Timestamps

• 29:15–34:17 — Tesla segment with Matt Miller & Hannah Elliott interview

4. Mortgage Controversy: Officials & "Principal Residence" Pledges

Key Discussion Points

• Pulitzer-winning Reporter Zach Meider on Mortgage Pledges:

  • Examines treasury officials and Fed Governor Lisa Cook occupying, or pledging to occupy, two primary residences on different mortgages.
  • Distinguishes between paperwork errors and intentional fraud, noting that such situations are not uncommon among officials, and typically are the result of administrative oversights rather than malfeasance.
    • “Maybe just because these two pieces of paper are filed saying you're going to live in two different places, it doesn't mean that you've necessarily committed mortgage fraud.” — Zach Meider (41:46)

• Legal and Political Implications:

  • The case continues against Lisa Cook, but there is “a pretty good argument that this wasn’t fraud at all and that maybe it was just a matter of not filing...paperwork in the right order.” (40:16)

Notable Quotes

• “It's probably not all that rare for people to actually do it because of fraud. But in all of these cases...there's often an innocent explanation...” — Zach Meider (40:16)
• “If people like you and I don't commit ourselves to positive change, the answer is 100% bad.” — Ethan Penner (23:04)

Timestamps

• 37:03–45:10 — Mortgage controversy explanation with Zach Meider

5. Additional Notables

• AI and Business Innovations:
  • Multiple mentions of Siemens Xcelerator and Amazon Business, emphasizing the continuing role of technology and AI in improving productivity and business operations.

Summary Table of Key Segments

| Time | Segment | Key Speakers | |-------------|----------------------------------------------------------------|--------------------------| | 02:30–11:08 | Fed Policy, Labor Market, Mandates Conflict, Market Impacts | DiMartino Booth, Hosts | | 13:35–26:53 | CA Gubernatorial Race, Tax/Housing/Homelessness Reform | Ethan Penner, Hosts | | 29:15–34:17 | Tesla Door Handle Redesign, Safety & Regulatory Compliance | Matt Miller, von Holzhausen, Hosts | | 37:03–45:10 | Mortgage Allegations Against U.S. Officials | Zach Meider, Hosts |

Conclusion

This episode offers a rich exploration of the intersection between government policy and economic realities—from the Federal Reserve's calculated moves amid labor market challenges, to innovative proposals in state politics, and evolving corporate responsibilities in product safety and transparency. The candid interviews and in-depth discussions yield practical insights into the complexity of today’s economy, governance, and business landscape.