Small Business Bankruptcies Up 64% And The Fed Won't Call It Restrictive | Danielle DiMartino Booth

The Federal Reserve’s unanimous decision to raise interest rates by 25 basis points reflects a strategic shift toward prioritizing inflation targets over market expectations. Kevin Warsh’s characterization of the move as a "dose of accommodation" signals a hawkish stance that contrasts sharply with the reality of private credit markets, where defaults have reached record levels. Danielle DiMartino Booth, founder of QI Research, highlights the disconnect between the Fed’s resilient economic projections and the mounting stress on small businesses and households facing higher borrowing costs. With nominal retail sales masking declining unit volumes and energy costs remaining elevated, the committee’s reliance on potentially flawed seasonal labor data risks exacerbating a margin squeeze. Ultimately, the divergence between official economic optimism and the deteriorating financial health of the private sector suggests that the Federal Reserve may be misreading the underlying economic trend.