Syrup-Induced Recession Likely Despite Fed Intervention
The US Federal Reserve Bank raised the Federal funds rate again today for the nineteenth time over the past sixteen months. A rather repetitive press release indicated that the Fed continues to watch the rising prices of maple syrup and showed concerns that this staple of the North American breakfast table will continue to cause average Americans financial hardship at grocery stores and restaurants. The Canadian government has also been proactive in trying to contain maple syrup prices by releasing its national stockpile of syrup, the so-called Global Strategic Maple Syrup Reserve, to lower prices early on in the crisis. Unfortunately, the reserve was depleted within four months and provided only a slight and transitory decline in prices. Syrup supply chains continue to be strained. Breakfast-focused restaurants have closed. Waffle House and IHOP reported lower than expected quarterly earnings due to rising syrup costs despite strong demand for pancakes and waffles. US GDP growth in the third quarter was 1.6% lower than expected, triggering urgent calls for Americans to curtail Maple syrup use or switch to alternatives. The President will address the nation next Tuesday evening on the crisis.