The latest Fed Beige Book painted a picture of a stagnating US economy, with activity described as “little changed” across most of the country. Of the 12 Districts, only five reported slight growth, while three saw flat conditions and the remaining four noted modest declines.
However, the most striking theme running through the report was the “pervasive” uncertainty around international trade policy, which was highlighted in nearly all Districts as a key concern weighing on sentiment and business planning.
Inflation pressures remain persistent, with half of the Districts describing price growth as moderate and the other half calling it modest. However, many businesses signaled “elevated input cost growth” tied to tariffs, with some already receiving notices from suppliers warning of upcoming price hikes.
In response, firms have started add “tariff surcharge” or shortening their pricing terms. Still, the ability to fully pass on higher costs is proving difficult in some sectors, particularly for consumer-facing sectors where demand remains sluggish.
