Beige Book: US Federal Reserve only sees "modest" economic growth

In all twelve districts of the Fed, however, economic output continued to grow, according to the economic report published on Wednesday (Beige Book). In most cases, however, only “slight or modest growth” was observed. The report published on April 20 still spoke of moderate growth overall. Four districts specifically observed a slowdown in growth.

Labor market and supply chains as challenges

The difficult situation on the labor market and the disruptions in the supply chains were among the greatest challenges. Rising interest rates, inflation, the Ukraine war and the consequences of the pandemic were also mentioned.

Employment has risen moderately in all districts, and workers are in short supply. Looking at inflation, most regions had seen strong or robust price increases, particularly input prices.

The US Federal Reserve prepares the next meeting with the Beige Book. It is a summary of comments from the twelve US regional central banks reporting on the current economic situation in their respective regions. The next Fed meeting is on June 14th and 15th.

In May, in view of high inflation and the threat of overheating in the labor market, the Fed raised its key interest rate by 50 basis points, the largest rate hike in 22 years. Fed Chair Jerome Powell and some of his colleagues have already signaled that similar measures will follow at the next two meetings following the big rate hike in May.

WASHINGTON (dpa-AFX/Dow Jones)

Image sources: fstockphoto / Shutterstock.com, spirit of america / Shutterstock.com