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Fed Beige Book Cites “Rising Uncertainty and Greater Downside Risk”
Although national economic activity continued to expand from early April to mid-May, conditions varied across industries and Federal Reserve Districts, the Fed said in its latest Beige Book report. In particular, commercial real estate activity softened during the period amid supply concerns, tight credit conditions and elevated borrowing costs.
“Overall outlooks grew somewhat more pessimistic amid reports of rising uncertainty and greater downside risk,” according to the Beige Book. Most of the Fed’s 12 districts reported slight or modest growth, while two noted no change in activity.
Retail spending was flat to up slightly, “reflecting lower discretionary spending and heightened price sensitivity among consumers,” according to the Fed. The central bank’s key measure of inflation, the personal consumption expenditures price index, is due to be released on Friday.
With inflation still trending above the Fed’s target of 2%, the Federal Open Market Committee is expected to maintain the benchmark interest rate in its current range at the June 11-12 meeting.
- ◦Economy
