Danielle DiMartino Booth: I’d Buy Gold on the Next Big Drop

VRIC Media Sep 26, 2026 38:15

Summary

Decades-high Treasury yields (the government's borrowing costs) are squeezing households, corporations, and the federal budget at once.

Danielle DiMartino Booth argues core inflation (prices excluding food and energy) keeps falling because paychecks cannot stretch further.

She calls the Fed's recent rate hike a blunt tool that cannot fix supply-driven inflation and mainly destroys demand.

Housing faces more downside: frozen sales, falling rents, and sticky property taxes point to a multi-year price unwind.

On gold she sees a floor forming, would treat a broad selloff as a buying opportunity, and notes central banks keep accumulating.

Top takeaway She expects gold to run higher from what she sees as a floor after the recent sell-off, and says she would treat a broad risk-asset correction that drags gold down as a buying opportunity.
She argues core inflation is falling and will keep falling as stretched households cut discretionary spending, which makes Fed officials look out of step with what companies see on the ground.
She expects home-price declines to accelerate as sidelined sellers add to heavy supply with mortgage rates pushing toward 7.5% as of late September 2026, and says prices remain far from affordable.
She argues the low unemployment rate is flattered by a labor force shrinking since November 2025, and that consistently downward-revised payroll reports should not be taken at face value.
She advises investors to insist on dividend-paying stocks while equities are as overvalued as she judges them to be, so they still get paid through a correction.

Top takeaway She sides with the recent Fed rate hike under Warsh being serious policy rather than posturing, pointing to the unanimous FOMC vote and the work she says he did to line up every vote.
She notes the dot plot shows most policymakers see only one more rate hike in 2026 before pausing for all of 2027.
She argues a late-October hike, six days before the midterms, would look political in nature and might draw a harsh reaction from President Trump.
She says someone should explain to Warsh, with humility and deference, that the unemployment rate stays low mainly because the labor force has been shrinking since November 2025.

Top takeaway He reads the University of Michigan consumer sentiment chart, at all-time lows since measurement began, as a warning that has historically been followed by recession.
He shares that he sold his own house last year after deciding he was not cut out to be a landlord, and now rents for far less than what friends pay on new mortgages.
He flags Washington state's labor market as getting hit hard on multiple fronts, after the guest noted the state's unusually high WARN notices.
He says property taxes keep rising in his area and plans to keep renting rather than buy again at current rates.

Top takeaway On Treasury Secretary Scott Bessent buying long-dated bonds again, the guest's verdict on whether it is effective is blunt: not so far.
She argues it would be premature to count Bessent out despite his portrayal in the media, noting he is a successful investor who does not need the job and chose to serve.
The host adds that Bessent interned under Jim Rogers and worked with George Soros, calling his investment background extensive.

Top takeaway The host says he recently interviewed Dr. Joanne Hsu, director of the University of Michigan's Surveys of Consumers, and uses her consumer sentiment survey in this episode.
The guest reads those sentiment readings, the lowest in history back to the 1960s, as evidence that inflation-squeezed paychecks are forcing households to cut back.