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Real estate 'slowdown' starts in 2023; The Fed caused "housing inflation" - Danielle DiMartino Booth
(Kitco News) - The U.S. Federal Reserve is to blame for inflation and rising housing prices, said Danielle DiMartino Booth, CEO of Quill Intelligence, who said that 2023 is the year a housing crash could start.
Speaking to Michelle Makori, Editor-in-Chief of Kitco News at the Vancouver Resource Investment Conference, Booth, a former Fed insider, suggested that Powell could have tackled inflation sooner.
However, he was cornered until his reappointment, due to politicking within the Fed.
"The politicization of the Fed has been toxic and it has impaired the ability to make policy in a timely manner," she said. "Randal Quarles, who was on the Federal Reserve Board, did a public interview recently and he said that he thought that the Fed would have moved a lot sooner had it not been for this kind of Game of Thrones going on."
Powell may have become more hawkish following his re-appointment, Booth noted.
"We could theoretically get to the point that broke markets in 2018, just in the next three Fed meetings… and quantitative tightening will be fully ramped up by the time we get through August… We're going to see what all, this time around, [Powell] is willing to break," he said.
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Booth suggested that, at this point, any talk of a "soft landing" is public relations. She said that we are already seeing signs of a recession.
"I see layoff announcements every day… Today was Netflix. A few days ago, it was Twitter, Meta, Amazon. The layoff notices are multiplying," she said. "You know, when [Powell] is at the podium, he's, 'Oh food inflation, Ukraine, and energy inflation, none of this is my fault.' Bless his heart, because housing inflation is the Fed's fault."
Booth said that Powell's monetary policy led to housing market speculation. She pointed to signs that a housing collapse is imminent.
"We certainly are seeing [housing] slow down and slow down fast… I think the latest data is 61 percent of all mortgage lenders are laying off their staff right now, reducing head count. We've got more homes under construction than any time since 1973… [And] mortgage rates are where they are. So affordability has never been as pinched as it is," she said.
She said that 2023 could be when housing prices start to fall.
On gold, Booth noted that the metal's price outlook is uncertain in these times, given the Fed's shift in rhetoric.
When asked which assets she is looking at as potential investments, Booth said, "What's coming ahead these days, I'm looking at farmland… The United States is by far the most productive nation in the world in terms of the yield that we get per acre that's planted."
On the political front, the U.S. midterm elections will hopefully slow down fiscal spending, Booth said. She also said that Biden's talk of student loan forgiveness would face legal challenges.
To find out Danielle DiMartino Booth's outlook for Bitcoin and gold, watch the above video.
Follow Michelle Makori on Twitter: @MichelleMakori
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