Beige Book Report: U.S. Economic Activity Records Modest Growth Amid Ongoing Inflation Concerns

The latest Beige Book report, released on Wednesday by the Federal Reserve,
indicated that U.S. economic activity experienced slight growth across most districts.
Three regions reported moderate to average growth, offsetting flat or slightly declining activity in two others.
The report, based on information collected from the 12 Federal Reserve districts, is published eight times a year.

Contents:

Beige Book
Inflation Concerns and Monetary Policy
Market Expectations for Rate Cuts

Beige Book

The report highlighted a moderate improvement in growth expectations across most regions and sectors.
Businesses expressed cautious optimism about the economy, anticipating an increase in demand over the coming months.
Price increases were generally modest across the Federal Reserve districts.

The report also noted growing challenges for businesses in passing higher costs onto customers.
Input prices were rising faster than selling prices for most companies, resulting in narrower profit margins.
Additionally, businesses expect the current pace of price growth to persist,
with several districts emphasizing that tariffs remain a significant risk to inflation.

Inflation Concerns and Monetary Policy

In a speech delivered in Washington this week, Federal Open Market Committee (FOMC) member Christopher Waller acknowledged
that recent data suggests the fight against inflation might slow at a level significantly above the 2% target.
However, he expressed confidence that inflation will continue its downward trend over the medium term.
Based on current data and forecasts, he indicated a preference for supporting a rate cut at the upcoming December meeting.

Market Expectations for Rate Cuts

The Federal Reserve is set to hold its final monetary policy meeting of the year on December 17–18.
Markets currently estimate a 77.5% probability of a 25-basis-point rate cut during the upcoming meeting.

Beige Book Report: U.S. Economic Activity Records Modest Growth

Beige Book Report: U.S. Economic Activity Records Modest Growth

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