America’s economy is too strong for its own good

Despite market turmoil, the Fed is set on relentless rate rises

FILE -- Visitors in Times Square in New York, Aug. 30, 2022. The number of tourists visiting New York City in 2022 is expected to rebound to 85% of the level in 2019, a year in which a record 66.6 million travelers came to the city. (Christopher Lee/The New York Times)Credit: New York Times / Redux / eyevineFor further information please contact eyevinetel: +44 (0) 20 8709 8709e-mail: info@eyevine.comwww.eyevine.com — Image: Eyevine/Redux/New York Times

Oct 6th 2022|Washington, DC

Two days after the latest interest-rate rise, the seven governors of the Federal Reserve met with some businessfolk. Any misgivings about the effects of tighter monetary policy would have been quickly dispelled. Cara Walton of Harbour Results, a consultancy, spoke of a plastics processor who hired 14 new employees, only for a mere three to show up on their first day (and one of those to quit before lunch). Cheetie Kumar, a restaurateur, said her peers were struggling to make rent as food and labour bills mounted. Tom Henning of Cash-Wa, a distribution company, explained his firm was passing costs onto customers. Demand was holding up, he said, thanks to the amount of money “floating out there in the economy”.

This article appeared in the Finance & economics section of the print edition under the headline “Overmighty”