Thanksgiving '22 felt very different for the rich vs. the poor. In Boston last week, I visited a fancy hotel whose $135 Thanksgiving brunch was on waitlist. Then a food pantry where people had lined the frigid block from 4:30 am for free turkeys. (1/) nytimes.com/2022/11/25/bus…

The split screen said something about the economy. Demand is holding up for the things people in the middle class and on up consume, because affluent consumers are doing well: Wages are rising, they're sitting on lots of excess savings. Fed chart: federalreserve.gov/econres/notes/…

Meanwhile, poorer people have run down their savings. They are combatting rapid inflation for necessities like food, heating fuel, rent and car repair. And they're turning to services — like the Greater Boston Food Bank and Catholic Charities — to bridge them through.

Things could get worse before they get better. Lower-income people seem to be turning to credit cards again to keep up (see link), but that will only work for so long. Meanwhile, Fed rate moves will likely dim the job outlook and slow wage growth. libertystreeteconomics.newyorkfed.org/2022/11/balanc…

The Fed says the impending pain is necessary: *Nobody* wants this inflation to continue! Delaying could mean even worse pain down the road. But the real-world example underlines why the stakes are so high as everyone hopes for a soft economic landing.