It sure looks like the Fed is hiking interest rates too fast

Four months after the US Federal Reserve started to hike interest rates, there are some clear signs the economy is slackening.

Manufacturing hit its lowest level in two years in June, according to data from the Institute for Supply Management manufacturing index released Friday. At the same time, the supply-chain crunch seems to be easing, with a growing number of factory managers saying suppliers are picking up the pace of deliveries.

That’s because high prices for everything from gasoline to food continue to eat away at Americans’ disposable income, cutting demand for products. The reopening of the economy has also meant consumers are spending more on services—and less on manufactured goods. The Fed’s interest rate increases, meanwhile, have raised the cost for financing equipment that manufacturers sell.

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