Fed’s Beige Book: Most districts exhibited slight to modest growth

The Federal Reserve’s Beige Book report was released on Wednesday indicating that the status of the US economy continued to grow in recent weeks, with most Fed districts achieving slight to modest growth, down from the moderate activity reported in the April.

the US dollar is higher, lifted by higher Treasury yields as global inflation worries flared anew. The dollar index (DXY), which measures the currency against six major peers, is rising by 0.77% to 102.567 at the time of print, extending Tuesday’s gains.

The DXY is reaching into an area of daily resistance where a correction could be on the cards on this hourly chart where the 61.8% ratio meets prior resistance.

The impact of higher interest rates and inflation is beginning to show up. Four districts have reported that the pace of growth had slowed since the prior period. Retail contacts noted some softening as consumers faced higher prices, and “residential real estate contacts observed weakness as buyers faced high prices and rising interest rates,” the report said.

Eight of the Fed’s 12 districts said expectations of future growth had diminished. Contacts in three of those districts specifically voiced concerns about a recession.

Key Quotes

While firms generally anticipate wages to rise further over next year, one district indicated firms’ expected wage growth has fallen 2 consecutive quarters.

More than half of the districts cited some customer pushback on higher prices.

Contacts in 2 districts noted rapid price increases continuing; 3 observed it had moderated somewhat.

More than half of the districts cited some customer pushback on higher prices.

Contacts in 2 districts noted rapid price increases continuing; 3 observed it had moderated somewhat.

While firms generally anticipate wages to rise further over next year, one district indicated firms’ expected wage growth has fallen 2 consecutive quarters.