Danielle DiMartino Booth via on ‘Making Money with Charles Payne’ To Discuss Fed Rate Hike — Pt 3

Give it up for Danielle Di Martino. [music] >> Danielle Di Martino. >> Danielle Di Martino Booth. We're going to jump in here. A lot of questions have been asked. A lot of a lot of deflections. Maybe reminds you of your favorite superhero. And so but they were warned, right? So let's bring in Danielle, Gabrielle, and Jim. Gabrielle, let me start with you. So when when when war says the Fed has a role in sustaining economic progress but they hike rates to the novice, that seems counterintuitive or or to to conflict one another. You know, you know, how does how do you an economy that they looks pretty good and it's growing? Why would you slow that down? >> So I think he framed this decision in two with two different explanations. One and a phrase that I wrote down is an attitude of optimism. >> I wrote that down, too. >> The economy >> it meant, but I loved it. >> I loved it. I think he meant the economy is resilient. Probably the neutral rate is a bit higher. >> We also saw that the committee members themselves were optimistic, which is not something I get from them on an individual basis. >> I I noticed that in the long run, dot, it did shift up 10 basis points. And then if you look at the actual dots themselves, a lot of the dots are above 3%. So that's signaling this is a stronger economy. It probably has a higher neutral long-run rate. So actually policies are accommodative. So resilient economy, you don't need that emergency medicine. You're removing some emergency medicine. The second reason he gave was around the price stability side. Inflation's too high. I didn't like the trend. So we need to help the average American by hiking now before it's too late. >> Right. So and that that's probably the greatest point I guess, you know, your your actions won't bring down gasoline, won't bring down medical insurance, it won't bring down pet insurance, any of that stuff. And he talked to Danielle about the second and third third order effect. In other words, prices bleeding out from things they can affect to and increasing things other things. Uh you know, again, for the layman, it seems like how does that Is that true? Does that really happen? >> [sighs and gasps] >> You know, Charles, we will see. Uh for the layman, they're going to see their credit card rate go up immediately. They're going to see their their HELOC their their home equity equity line of credit line interest rate go up immediately. Um you've got small business bankruptcies up 64% year-over-year. You've got National Federation of Independent Businesses voicing concern over the level of interest rates. American households are doing so as well. I mean, the criticism here is that is that monetary policy is being made for a very small cohort of the US economy as opposed to what is on the front page of the Fed's website, which says that monetary policy should be made in the broad public good. >> Right. Right. You know, Jim, so I'm looking at the uh the the uh economic projections. And what was stands out for me so in 2026, GDP 2.3%. Next year's 2.4%. This year in core inflation is 3.4%. It's going to go all the way down to 2.5% even though the GDP will be stronger. I mean, what is that all about? I mean, I love it. I hope that happens, but that suggests to me that there must be more powerful forces pushing down prices than just the Fed. >> We're watching Kabuki theater. That's what we're doing. My opinion is he raised 25 so people can't say that he's in Trump's hip pocket. The 25 basis points is not going to kick in for 24 months. He says everything's okay. Well, go do some research on what Home Home Depot, Lowe's, or JB Hunt did. Go look at the employment in the retail >> JB Hunt this morning warned uh the stock is down 12%. Uh it's a trucking the perhaps the biggest trucking company in America, a great proxy for how the health of America. >> Mhm. >> That's you know I was always use this term the Plato's cave. I'm actually out looking at companies reports. Look at financials are down. Tech secular growth is up. I don't see how he thinks that he's raising into a negative growth shock. I want to be at the breakfast between him and Bullard because Bullard's out there basically saying explicitly you don't hike into a growth shock. So with this guy, I would sit there and say worst, he failed Jackson Hole. He failed here. And I am sitting here looking at this holistically out 24 months. If we're going to run this economy hot, it is not clear to me that he is willing to adjust the reaction function of the Fed right now. And to me for investors, that's the big risk, not this 25. It's how he's framing everything and how he's disregarding what the actual data in some of the a very large cohort of the US economy. >> Real quick Gabriella, the market though the stock market is not too focused on Main Street. They want a Fed to to to be their Fed. And maybe to Jim's displeasure maybe today Worsh became their guy. You know, maybe we'll see the market hold up today. Remember last time it fell completely apart in the last hour trading. Maybe we'll see it up tomorrow. Maybe we'll say hey, this is a guy that will work with us. >> I think it's I like to say that the stock market is up because of strong earnings, not necessarily a very strong economy. And that's where there are some really big differences between what you're hearing from consumer, your very cyclical companies, which are saying things are okay, but not great. And what's really powering the stock market, which is AI and the AI build out. I think what the market is going to like, that Chair Walsh talked about, is he referred to it as as I like a discipline, not a decision. Basically, he's saying, "I'm going to give you a reaction function. I'm not going to give you forward guidance." The market wanted a reaction function, and we now have one. >> I hope we can get off of this overreaction to data report data to individual data. >> Yeah, we I mean, look, >> [clears throat] >> to the extent that we can take baby steps towards not having a reactive Fed, that that is that is overwhelming good news. He used I don't know how many times he today he's used the word trend. Economists look at a trend as being three months. One, two, three months in a row makes for a trend. Charles, we've got three more payroll reports between now and the December Fed meeting. So, all kinds of things. He's talked about the 7-week period in between the the last few times the Fed met Fed meets. He's not going to raise rates or do anything for that matter 6 days before an election, but boy, has he got a lot of trends ahead of him between now and when the Fed meets in December. >> All right. Let's go back and listen to more Chair Walsh.