Federal Reserve insider DiMartino Booth writes tell all book on the Fed

federal reserve

DiMartino Booth has an impressive resume. She started her career on Wall Street working for Credit Suisse in fixed income and the public and private equity markets  She then wrote a column for the Dallas Morning News before landing at the Dallas Federal Reserve branch as a financial advisor to Richard Fischer, who sat on the Federal Open Market Committee during those years. Fischer made a name for himself as being one of the few dissenters during the Federal Reserve stimulus era of quantitative easing. He also is on record in the Federal Open Market Committee meetings warning of the coming housing crash before it played out.

DiMartino Booth had a front row seat to financial history. After nine years in the Federal Reserve system, she came to the conclusion that the Fed is terrible for America’s financial system. She explains why she feels this way in a rare tell-all book from a former Fed insider titled: Fed Up: An Insider’s Take on Why the Federal Reserve is Bad for America.

Over the last several months she has embarked on a far-reaching media tour for the book. The book has reached number one in several key financial categories on Amazon.

What she learned about the Fed and the potential for insider trading

When it comes to insider trading, she doesn’t believe it is as blatant as Janet Yellen picking up the phone and allowing a trader to front run a policy decision.

However she did have this to say,”…the ability for Federal Reserve policymakers to meet with those in the private sector has not been reined in, and I think we saw evidence of that with a recent Brookings Institution private audience with the vice chair Stanley Fischer and some of the people who sat on that board are members of some of the largest shadow banking entities on planet Earth.”

She went on to add,”the Federal Reserve don’t feel that there’s a conflict of interest involved in having private audiences with those who can benefit the most profit-wise.”

Solutions to the problem

Booth believes bringing back the Glass-Steagall Act, which separated commercial deposit banks from investment banks.

She stated,”…if you’re going to bring deposits in and the commercial safety-net of the U.S. government under you, don’t take the taxpayers’ money to Vegas and borrow and play with it and speculate with it, keep investment banking activities outside of anything that will ever touch the taxpayers’ purse.”

Booth on the Fed’s dual mandate

Currently, Congress charges the Federal Reserve with two responsibilities. The first is to keep inflation at a reasonable percentage to protect the value of the US dollar. The second is to keep unemployment low, or in ‘Fed speak’ strive for “maximum employment” with their monetary policies. This article explores the dual mandate in greater depth.

Speaking on the dual mandate Booth said,”the Fed does not have the correct tools to address the labor market – it is what’s caused “mission creep” within the institution. Remove that from the Federal Reserve and leave them simply with safeguarding the buying power of the U.S. dollar, period.”

Overall the book is an interesting read.

In conclusion, I commend her for offering the public a rare glimpse into the inside world of the Federal Reserve.