The Taylor Swift effect in the United States: “She stimulated the American economy”

The effect of "Taylor Swift", mega pop star whose tour in the United States broke records, has stimulated the American economy in recent months, underlined Thursday the president of the New York Fed, John Williams.

“There is clearly a Taylor Swift effect on consumer spending because people spent on the concert, the hotel, all of that was a big phenomenon,” said the head of the New York branch of the American central bank, during an interview on Bloomberg TV.

With 146 dates in sold-out stadiums, Taylor Swift, on tour since March in the United States and Mexico, should reach a billion dollars in revenue. She will continue her concerts in Argentina, Europe, Asia, Australia, Canada, until the end of next year

The month of May was even the strongest 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 responsible for the sector cited in the Fed's Beige Book, a survey published in early July.

Overall, "demand is strong. We are seeing this rotation (of spending) from goods to services that we were talking about a year ago. People are traveling more, going to restaurants, going to shows," detailed John Williams.

In fact, it is now the prices of services that are driving inflation upwards, while the prices of goods are falling.

The Fed, working to slow inflation, has raised its rates 11 times since March 2022, in order to increase the cost of credit, and, thus, slow down consumption and investment. To ultimately ease the pressure on prices.