Brew Markets – "Is This A Watershed Moment for the Fed?"

Host: Ann Berry
Guest: Danielle DiMartino Booth, CEO & Chief Strategist, QI Research
Date: October 13, 2025

Episode Overview

In this thought-provoking episode, Ann Berry welcomes Danielle DiMartino Booth, a noted Federal Reserve insider, analyst, and CEO of QI Research, to discuss the current pivotal moment for the Fed. With missing government labor data (thanks to a shutdown), growing political pressure on the Fed, shifting approaches to monetary policy, and alarming developments in private credit and structured finance, this episode dives deep into what it all means for markets and the broader economy. The discussion ranges from Fed independence to asset bubbles, labor market risks, and practical advice for the next generation of workers and investors.

Key Topics & Insights

1. The Latest Fed Minutes & The State of Fed Independence

Timestamps: [06:20] – [11:02]

• Danielle's Read: The September FOMC meeting minutes underscore both dissent and unity inside the Fed, even after new board additions.

• Some members favored not cutting rates due to inflation concerns, others called for bigger cuts—yet the Fed presented a united front.

  "They made a very, very strong stand for Fed independence."
  — Danielle DiMartino Booth [06:56]

• What Comes Next?
  With missing government employment data (shutdown), the Fed is relying on alternative labor indicators—with proprietary data sets like ADP in play.

  "It's pretty difficult to be flying as blind as they are... Markets have already fully priced in a quarter point additional rate cut on October 29th."
  — Danielle DiMartino Booth [07:26]

2. Labor Market Data, Revisions, and a Permanent Shift?

Timestamps: [10:16] – [14:14]

• Ann highlights Danielle’s long-standing advocacy for using alternative data in labor market analysis.

• A Watershed Moment:
  The shutdown and unreliable official stats may finally push the Fed to diversify data sources—a change Danielle champions.

  "This is a watershed moment for Fed policymakers... 89% of polled economists across the United States, we're saying whatever it is we're getting, it's not kosher. It's not even acceptable..."
  — Danielle DiMartino Booth [11:03]

• The problem: Stale official data, frequent and sizable revisions, and employers faking job postings to boost morale.

• Quiet layoffs (below reporting thresholds) and hiring freezes create headcount reductions hidden from official reports.

• Final accurate numbers come only quarterly, forcing eventual catch-up—and often abrupt revisions.

3. Structural Shifts: Inflation, Politics, and the Fed’s Dual Mandate

Timestamps: [15:36] – [18:07]

• The Fed’s focus has shifted over the decades from inflation to labor—the labor "obsession" led to the neglect of asset price bubbles.

  "They became obsessed with the labor mandate to the extent that they were able to completely blindly disregard asset price inflation..."
  — Danielle DiMartino Booth [17:18]

• Fed independence is increasingly under threat—politicization dates back decades, with figures like Greenspan loving public adoration and setting up the “Fed put.”

• Even as the Fed tries to strike an independent pose, external pressures (stock market, White House, Congress) are ever-present.

4. Are We in a Bubble? Tech, AI, Private Credit, & Enron Echoes

Timestamps: [18:44] – [23:00]

• Ann draws a parallel between Powell's recent comments and Greenspan's "irrational exuberance" speech.

• Danielle unequivocally says we're in a bubble—but as in 1999 or 2000, bubbles can run for years.

• Key Risk:
  The proliferation of opaque private credit, vendor financing, and circular financial relationships harks back to Enron:

  "When you start providing the people buying your products with the financing that they need to buy them... that's circular in nature. Isn't that a red flag?... Enron was just a massive financing company."
  — Danielle DiMartino Booth [19:13, 20:54]

• Recent collapses (First Brands) and the integration of AI company financing into these structures suggest risks are systemic and growing.

5. Gold, Bitcoin, and the Meme Asset Craze

Timestamps: [23:00] – [25:31]

• Gold is at record highs, but Danielle warns institutional buy-in is for momentum, not true hedging.

  "Now it's a meme stock... when people who've never mentioned the word gold start talking about how much of it you should own, it's great to be recognized, but they're not recognizing it for its purpose..."
  — Danielle DiMartino Booth [24:12, 24:45]

• Big banks recommending 20% gold positions underline the speculative fervor.

• Ann asks about Bitcoin; Danielle admits its “higher beta” but prefers the fundamental utility of gold.

6. Investing in the Current Climate

Timestamps: [25:35] – [26:55]

• Equities are overvalued, but some dividend-paying, old-economy companies still have appeal.
• Many top investors and Berkshire Hathaway are sitting on enormous cash piles.
• It's a very difficult environment to find value.

7. The Next Generation: Jobs, Skills, and Surviving the Labor Market

Timestamps: [26:55] – [31:56]

• New graduates face the toughest job market since 1988—but unlike then, today’s problem is demand collapse, not just supply surge.

• Danielle, as a mother, sees first-hand the disillusionment among students (“What have I just done for the last four years?”).

• Political paralysis keeps companies from investing or hiring; AI adoption accelerates the replacement of entry-level workers.

• Key takeaways for young people:

  • Go into trades or healthcare—professions machines can’t fully replace.
  • Even overqualified grads should consider non-traditional career entries (like owning an HVAC company).
  • In high-status fields (law, accounting, forensics), aim to be irreplaceable, not just credentialed.

  "If you, as a human being, can outthink [machines]... in the interim, take any job you can get and nothing is beneath you. Remember that."
  — Danielle DiMartino Booth [31:56]

Notable Quotes & Memorable Moments

• "This is a watershed moment for Fed policymakers." [11:03] – Danielle DiMartino Booth
• "They made a very, very strong stand for Fed independence." [06:56] – Danielle DiMartino Booth
• "It's pretty difficult to be flying as blind as they are..." [07:26] – Danielle DiMartino Booth
• "A blind person can see valuations being where they are... we've surpassed anything that we saw in 2000." [19:13] – Danielle DiMartino Booth
• "When people who've never mentioned the word gold start talking about how much of it you should own, it's great to be recognized, but they're not recognizing it for its purpose." [24:45] – Danielle DiMartino Booth
• "Nothing is beneath you. Remember that." [31:56] – Danielle DiMartino Booth

Segment Timestamps (Key Discussion Points)

• Fed Minutes & Independence: [06:20]–[11:02]
• Labor Data & The Rise of Alternative Indicators: [10:16]–[14:14]
• Labor vs. Inflation Mandate + Politics: [15:36]–[18:07]
• Bubble Risks, Private Credit, & Enron Echoes: [18:44]–[23:00]
• Gold & Meme Assets: [23:00]–[25:31]
• Dividend Investing & Cash Hoards: [25:35]–[26:55]
• Youth Labor Market & Advice for New Workers: [26:55]–[31:56]

Tone & Style

Ann Berry’s questions are incisive but personable; Danielle is candid, analytical, and sometimes wry—often providing data-driven critique with a pragmatic, at times urgent, sense of the stakes.

Takeaways

• The Fed is under greater stress than most realize, with data vacuums and political pressures threatening real independence.
• Asset valuations are stretched, bubbles are growing, and systemic risks are building—especially with private credit and financial engineering.
• Young people must rethink career-building: prioritize un-automatable trades and skills, be flexible, and accept any foothold in the market.
• In uncertain times, being irreplaceable matters more than prestige or credentialing.

For listeners, this episode delivers context, perspective, and actionable wisdom at a moment of profound economic uncertainty.