Economy: Hawkish Fed brings market jitters
Federal Reserve chairman Jerome Powell sounded a more hawkish note on monetary policy last week, said Howard Schneider and Ann Saphir in Reuters, sending markets down as traders anticipated a slowdown in the economy. Powell said a half-point rate increase, the first in 22 years, “will be on the table” when policymakers meet again in May. That has led traders to expect the Fed to quickly raise the key rate it charges banks to between 2.75 and 3 percent by year’s end, a territory “that would begin to restrict economic activity.” But the Fed has heightened its focus on taming inflation, which has become “a pressing political issue.”
Traders think “the Fed has lost control over inflation,” said
Lisa Abramowicz in Bloomberg. Despite the more aggressive rhetoric from the central bank, they “keep boosting their longerterm inflation expectations,” suggesting that markets believe the Fed will err on the side of caution. In hindsight, “the Fed made a mistake continuing to buy bonds to support the economy for as long as it did,” and it may be headed toward similar miscalculations. “If the Fed wants to regain control over the inflation narrative, it has to take bold actions to match its tough talk. The bar for what’s considered bold is getting higher the longer it fails to act.”
A clean business: The luxury car wash
Some luxury car washes now invite you to dine while you wait, said Mike Jordan in The Wall Street Journal—and in some cases, drink and dance. Technological advancements and rising real-estate prices have made opening a car wash more expensive than ever; it costs about $7 million to set up an express exterior car wash today. So entrepreneurs are “getting creative with amenities” to entice customers to opt for more time-consuming—and expensive—services. In Atlanta, Lemont Bradley opened the Auto Spa Bistro to “make his car wash more like a club.” There is a hookah lounge, a bar, and a restaurant serving everything from omelets to lamb chops. Clean Ride Auto Spa, in Sioux Falls,
S.D., installed “petwashing stations” as an amenity. Some of the more unique car-wash operations are opening in Europe; one in Zurich “has a dance club on the second floor.”