#378 Danielle DiMartino Booth: Warsh Gets 9/10, Finally "Fed Up Too," Removes Dot Plot

In this episode, Danielle DiMartino Booth, CEO of QI Research and former Fed insider, gives Kevin Warsh a 9 out of 10 on his first FOMC meeting and press conference, saying "it sounds like he's fed up too" after witnessing a dramatic departure from Powell's approach. Warsh delivered a remarkably short statement (140 words vs Powell's 341 words), removed the dot plot entirely ("show don't tell"), eliminated forward guidance, and created five task forces including communications overhaul, data exploration, and inflationary frameworks review. Danielle was thrilled he's revisiting the arbitrary 2% inflation target, moving away from core PCE (which she calls "a bunch of BS" because stock market gains inflate the metric), and exploring trim mean inflation instead. Warsh went to a grocery store asking people if Fed policy actually helps with gas, beef, and egg prices—demonstrating he understands Fed policy cannot address supply-driven inflation. He called non-farm payroll data "echoes of history" and demanded accountability, slamming the NBER for being "derelict in their duty" to call recessions when bankruptcy filings are up 38% year-over-year and personal bankruptcies surged 8%. Danielle warns the market is "calling his bluff" after today's sell-off, notes no junk bonds have been sold in 41 days signaling credit stress, and says to watch the MOVE index and credit spreads closely as the next tell. She's cautiously optimistic but "wait and see," drawing comparisons to Powell's 2018 pivot when he reversed course after market pain. Warsh managed a unanimous vote despite the aggressive reform agenda.

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Links:

Danielle's Twitter/X: https://twitter.com/dimartinobooth

Substack: https://dimartinobooth.substack.com/

YouTube: https://www.youtube.com/@DanielleDiMartinoBoothQI

Fed Up: https://www.amazon.com/Fed-Up-Insiders-Federal-Reserve/dp/0735211655

Timestamps:

0:00 Introduction - Fed day with Danielle DiMartino Booth

1:37 Statement very short - 140 words vs Powell's 341, "fed up too"

2:14 No forward guidance, removed dot plot - "show don't tell"

3:13 Warsh strategic approach - "I'm going to fix this broken institution"

5:20 Five task forces including communications and inflationary frameworks

7:48 Revisit 2% inflation target - Arbitrary and unnecessary

14:10 Rate cuts - most traders on Kalshi expect zero

16:57 Markets lower today, Wall Street calling his bluff

17:51 Bankruptcies up 38.4% year over year, personal up 8%

19:00 NBER derelict in recession calling - Should have called 2025

24:43 Non-farm payroll data unreliable until third revision - "echoes of history"

26:09 Financial markets work best reacting to real data, not Fed speak

27:20 Overall impression 9 out of 10, cautiously optimistic

29:15 Watch MOVE index and credit spreads for next signal

30:00 Warsh got unanimous vote - Corralled all governors