Danielle DiMartino Booth, holding the dual roles of CEO and chief strategist at QI Research, foresees that the 22-year peak in interest rates set by the Fed is merely a precursor to what’s to come. She anticipates further upheaval within the banking industry. The strategist articulated her belief that we have not yet witnessed the “full damage” wrought by the rate increases and their subsequent impact on the U.S. economy.
QI Research’s CEO Analyzes the Fed’s 22-Year Interest Rate Peak
This year marked a tumultuous period in the U.S. banking industry, with three of the largest bank failures in American history occurring in just a few short weeks. Then, last Friday, the Kansas banking regulator took action by shuttering Heartland Tri-State Bank. Much like the three aforementioned banks, this financial institution was placed into receivership with the Federal Deposit Insurance Corporation (FDIC).
On July 27, 2023, Danielle DiMartino Booth, CEO and chief strategist at QI Research, made an appearance in a video interview with Kitco News’ lead anchor and editor-in-chief, Michelle Makori, sharing insights about the predicted turbulence ahead. In the conversation, DiMartino Booth shed light on the recent ‘forced’ merger between Pacwest and Banc of California, attributing the fallout to “Federal Reserve policy.”
She informed Makori, “After First Republic, the assumption in the investing community was that Pacwest would be the next bank to go. So what we’re seeing is something that is slow-moving in nature, but if you’re having forced marriages, and JPMorgan announcing that it’s going to be buying $2 billion of mortgages from this brokered deal, we’re clearly still in a situation with tightening lending standards.”
DiMartino Booth explained that a “slow-rolling recession” is encroaching, and she argues that the reverberations of the Fed’s elevated rates will wreak further turmoil in the economy. Other financial experts and analysts share her sentiments, including gold enthusiast and economist Peter Schiff, as well as Rich Dad Poor Dad author Robert Kiyosaki.
In a recent research paper unveiled on the Social Science Research Network, it was revealed that 186 U.S. banks are teetering on the edge of failure, imperiled by a considerable volume of uninsured deposits and the Fed’s towering interest rates. “I don’t think that we have seen the full brunt, the full outcome, the full damage that rate hikes past are going to take on the economy,” DiMartino Booth conveyed to the show host.
The chief strategist at QI Research added:
The New York Federal Reserve put out a survey just a few days ago that indicated that lenders that extend credit for mortgages and auto loans and credit cards, that they foresee going out into the future, the highest rejection rates for U.S. households in the history of them doing business.
DiMartino Booth went on to express her anticipation that American banks are poised to reel from the collapse of commercial real estate. At present, the QI CEO discerns a great deal of “pretending” transpiring within the commercial real estate industry. Demonstrating her faith in precious metals, the strategist holds a bullish stance on gold, while maintaining no exposure to U.S. stocks. Furthermore, she noted that her current allocation in gold surpasses what she would typically assign to the asset.
What do you think about DiMartino Booth’s commentary? Do you share the same sentiment about the U.S. economy? Share your thoughts and opinions about this subject in the comments section below.
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