The challenge confronting the Federal Reserve as it meets this week is a tale of two economies. Wall Street investors are behaving as if the economic expansion is in grave danger, while the best available data show that the U.S. economy has continued to grow at a healthy pace.
The disconnect is visible on other Wall Streets across the United States.
Dorice Soroka, who runs a small company at Wall Street and Myrtle Lane in Daytona Beach, Florida, said her revenue has finally reached the level she last saw in 2006. “And that was unhealthy growth,” Soroka said of the years before the crisis. “This is much more healthy.”
Peoples State Bank, on East Wall Street in Eagle River, Wisconsin, also is prospering.
“Our market areas remain economically healthy,” said Scott M. Cattanach, the president of PSB Holdings, which operates nine branches in central and northern Wisconsin. The bank recently reported that profits rose 28 percent in the third quarter, and demand for development loans remained strong in the fourth quarter.
The Fed on Wednesday is widely expected to recognize the continued strength of the economy by announcing a quarter-point increase in its benchmark interest rate after a two-day meeting of the Federal Open Market Committee. But the central bank also is expected to tip its hat to queasy investors by emphasizing that future rate increases will depend on continued economic growth.
That would amount to an acknowledgment that 2018 has been a very good year on Wall Streets across the United States — but that there is growing reason to worry about the coming year.
Read more in The New York Times.