Federal Reserve Beige Book: Economic Activity Moderately Declines, Labor Market Remains Stable
The latest Federal Reserve Beige Book shows that U.S. economic activity is moderating, but the labor market remains stable.
Bloomberg reporter Catarina Saraiva points out that this report has a similar tone to this year's, with businesses and consumer sentiment becoming increasingly cautious, mainly due to ongoing trade tensions and tariffs. Everyone is watching how this trade war will develop.
The report mentions tariffs 122 times, and "moderate economic decline" is a common phenomenon across regions. However, Saraiva also emphasizes that American consumers are displaying remarkable resilience, with consumption remaining strong, largely thanks to a stable job market. Although retail sales have seen slight growth, large purchases have cooled off.
Regarding inflation, the report once again sounds the alarm. There is a risk of inflation expectations becoming unanchored, which could weaken the Federal Reserve's ability to control prices. Fortunately, despite recent fluctuations in sentiment, most market inflation indicators remain relatively stable.
Additionally, Saraiva talked about Federal Reserve Governor Michelle Bowman. She is known for supporting loose regulations and opposing increased capital requirements, often aligning with industry views on regulation, but she also advocates for strict oversight and calls for an independent review of the Silicon Valley Bank incident.
Saraiva also mentioned that Bowman's prudent and accommodative stance as a Federal Reserve governor has proven her to be a responsible policymaker. At the same time, she hinted that Bowman may have become a potential candidate to succeed Powell.
In summary, economic slowdown, tariff clouds, inflation concerns... every economic-related data released by the Federal Reserve constantly stirs the market nerves!
What is your judgment on the future direction of the economy? Steady progress or undercurrents? Share your thoughts in the comments section!
