From moviegoers dressing in pink to see the Barbie movie to Taylor Swift fans shelling out big bucks to see her "Eras" tour, consumers are still spending on big events. Both pop culture phenoms were referenced in a question to Federal Reserve Chair Jerome Powell about consumer spending and economic growth. Powell said "it's good to see" the economy remain resilient despite the Fed raising rates, but he notes they will be watching to make sure that economic strength doesn't lead to inflation rising again.
Powell did not say whether or not he has seen Barbie or the "Eras" tour.
Video Transcript
- Thanks for taking our questions, Chair Powell. Obviously you upgraded the language around growth in the statement today. We've seen the "Barbie" movie numbers. We've seen everyone going to Taylor Swift concerts this summer. It seems like the American consumer is in pretty good shape. And it does seem like growth is sort of picking back up a little bit or at least doing well.
And I wonder, from your perspective, if that continues. If we see growth not just stabilizing but performing well this summer, is that a problem because it's inflationary? Or is it good news because it suggests that a soft landing is more likely? Just how are you thinking about that sort of trajectory?
JEROME POWELL: Yeah, so I would say it this way. The overall resilience of the economy, the fact that we've been able to achieve disinflation so far without any meaningful negative impact on the labor market. The strength of the economy, overall, that's a good thing. It's good to see that, of course.
It's also you see consumer confidence coming up and things like that. That will support activity going forward. But you're right, though. At the margin, stronger growth could lead over time to higher inflation and that would require an appropriate response from monetary policy. So we'll be watching that carefully and seeing how it evolves over time.