The U.S. could currently be experiencing a recession, according to Danielle DiMartino Booth, CEO and Chief Strategist for QI Research.
In an interview with Kitco News’ Jeremy Szafron at the New Orleans Investment Conference, DiMartino Booth noted a troubling spike in bankruptcies, drawing parallels to the global financial crisis. “We’ve seen 19 bankruptcies of companies with $50 million or more in liabilities. The post-pandemic high was 23. The current run rate takes us back to the great financial crisis,” she explained. “And we’re seeing small bankruptcies as well. It’s filtering through into personal bankruptcies as U.S. households just have too much credit card, auto, personal loans, to say nothing of the mortgages.”
DiMartino Booth stated that the U.S. is “in a recession,” which likely began in April 2024. She pointed to negative revisions in private sector job numbers, noting that “we actually lost 28,000 jobs in the private sector” in October. These revisions have become “systematic in nature” and have been occurring since January 2022.
Federal Reserve’s Outlook: More Cuts Ahead
With 75 basis points of rate cuts already made since September, DiMartino Booth anticipates that the Federal Reserve will continue lowering interest rates in response to the ongoing recession. She emphasized that “the statisticians at the Federal Reserve are losing their mind” due to these recent data revisions, which are forcing them to adjust their models and likely push them toward further rate cuts.
She also observed that during the Trump administration, more “negative data” would have been released, highlighting the true scale of the recession. “We know that most government statisticians are very left-leaning in nature, which might have been one of the reasons why we haven’t seen the bad data come out. But going forward, they’re going to be much more amenable to letting the negative data taint the Trump administration,” she stated. “We’re going to realize that we are in recession. That gets us to the next question – when we’re going to come out of it.”
In light of the current economic conditions, DiMartino Booth recommended adopting a defensive strategy. She advises investing in “companies that are going to continue to pay their dividend, no matter what happens in the rest of the world,” as well as “collecting money on T-bills.” She remains bullish on gold, seeing it as “a logical place to have your diversification and defensive positions.”
