As anyone who has priced the cost of international travel can tell you, airfares for flights to Europe have skyrocketed. There are several reasons for this, none of which have anything to do with the Fed: the failure of the airlines to react in a timely manner to the increased demand following the waning of the pandemic; increased gas prices; and the amount of excess savings generated by pandemic restrictions and the relief bills. What can happen to eliminate the problem?
Nobody borrows money from a bank to finance a vacation. To the extent trips are being financed by balances on credit cards, the interest rates were already so high, any increases will go largely unnoticed. Nothing the Fed can or will do will matter.
The problem will be solved by consumer resistance to the high prices. That’s how we’re handling it.