Our guest today is Danielle DiMartino Booth, CEO and chief strategist for Quill intelligence. One of the major themes of our podcast series so far has been the reactions of central banks to the global pandemic, and it’s likely effects on inflation and asset prices. As a former Fed insider, with nine years of experience as an advisor to the president of the Dallas Fed, Danielle is uniquely positioned to give us her take on the action taken by central banks so far, and what their next move is likely to be. However, our conversation was not just about the Fed, as it covered many other interesting topics including the curious timing of the US-China trade talks and when we first learned about COVID in the autumn of 2019 (one for conspiracy theorists!).
Topics Discussed in this Episode
- QE and the transmission mechanism
“The number of people moving from Chinese Suburbs, urbanization if you will, a massive, massive secular trend, was coming to an end… You pile the trade war into this preexisting dynamic, in 2019, and you end up with the global economy headed for recession. At the same time, you had leverage, of course, in a very, very bad place.”
- US bond market
- Monetary policy rules and the choice of inflation measure
- Democracy: Revolution or direct democracy?
“Janet Yellen and Ben Bernanke were fighting, and fighting, and fighting for this two percent target for years but it wasn’t until Alan Greenspan left the Fed that they were able to actually implement it.”
- China-US trade
“The Fed is doing a lot for the top 1%. The Fed is helping private equity not get buried in some very bad investments that they have made. They’re helping the wealthy stay wealthier.”
- Negative interest rates
“The one thing that I will give J. Powell credit for is holding the line on negative interest rates. It’s clear from listening to everybody on the committee and every district president that there is unity and a cohesive solid front against negative interest rates”
- Bitcoin and ‘Fedcoin’