Given the keen competition, there s no room to pass these costs along to the ultimate consumer. In short, it s pretty tough to see inflation on the horizon for selling prices. They spent at a healthy 6 percent plus rate in the first quarter of 2000 and haven t slowed noticeably yet, despite higher home, energy, financing, and services costs. Access to credit has been pushed far and wide by a broad array of vendors. Banks, credit card companies, retail stores, restaurants, credit unions, insurance companies, etc., have lowered their credit risk and collateral requirements.
Consumers currently have the economy by the tail and can do as they wish with it.
They have lower selling prices thanks to global competition and the price transparency of the Internet. They have more information and an ability to process it or profit from it faster than ever before. They have greatly expanded resources to buy things with, and ample job opportunities to boot. It s the epitome of a consumerist nirvana and it s hard to fathom turning back the clock. But if the Fed really does want to slow things down, it can keep pushing until it gets its way.