“There’s clearly a Taylor Swift effect on consumer spending because people have been spending on the concert, the hotel, it’s all been a big phenomenon,” said the head of the New York branch of the US central bank, during an interview on Bloomberg TV.
With 146 dates in full stadiums, Taylor Swift, on tour since March in the United States and Mexico, should reach one billion dollars in revenue. She will continue her concerts in Argentina, Europe, Asia, Australia, Canada, until the end of next year.
More spending on services
May was even the strongest month for hotel revenues in Philadelphia (Pennsylvania) since the start of the pandemic, “largely thanks to an influx of visitors for Taylor Swift concerts in the city”, reported a sector official quoted in the Fed’s Beige Book, a survey published in early July.
Overall, “demand is strong. We see this rotation (of spending) from goods to services that we were talking about a year ago. People travel more, go to restaurants, go to shows,” John Williams said.
In fact, it is now the prices of services that are driving inflation up, while the prices of goods are falling.
Maintaining the rates decided at the end of September
The Fed, on the move to slow inflation, has raised its rates 11 times since March 2022, in order to increase the cost of credit, and thus slow consumption and investment. To, ultimately, ease the pressure on prices.
Its next meeting will take place on September 19-20, and market participants overwhelmingly expect rates to stay at the current level of 5.25-5.50%, the highest in 22 years.
Also read: US inflation picks up again, but moving in the right direction
John Williams did not specify whether he was in favor of keeping rates unchanged or raising them again, simply pointing out that “monetary policy is in a very good position, as it adopts a restrictive policy which produces the desired effects, at namely a better balance between supply and demand”.
The New York Fed chairman said inflation was “going in the right direction” but said the Fed remained on guard, asking “are we restrictive enough?”
2023-09-08 03:31:08
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