Danielle DiMartino Booth with Bloomberg Radio — Warsh boosts market expectations of Fed rate hold

The Federal Reserve is expected to adopt a "wait and see" data-dependent posture in its upcoming policy meeting as inflationary pressures show signs of significant narrowing. Danielle DiMartino Booth, CEO of QI Research, highlights that only 38% of CPI components currently show price increases above 3%, suggesting that the battle for price stability is gaining ground. While interest-rate-sensitive sectors like housing and land development signal distress—with land prices falling for the first time in 14 years—the broader economy appears increasingly reliant on artificial intelligence. Analysis indicates that AI-related investments may account for over 100% of recent GDP growth, masking a flatlining manufacturing sector that has seen little progress since early 2020. This heavy dependence on the AI trade, coupled with its sensitivity to bond issuance cycles by hyperscalers, presents a critical structural concern for Fed policymakers as they evaluate the true health of the U.S. economy.