WASHINGTON (Dow Jones)–According to a survey by the US Federal Reserve, economic activity in the USA has increased slightly since the beginning of January. According to the Federal Reserve’s Beige Book economic report, eight of the twelve regions reported moderate increases.
However, consumer spending has decreased in recent weeks and, among other things, there has been greater price sensitivity. Demand in the hospitality industry was also subdued due to higher prices.
According to Beige Book, activity in the manufacturing sector was largely unchanged and supply chains continued to normalize. The impact of disruptions to trade routes in the Red Sea and the Panama Canal was minimal.
The prospects for future economic growth remain generally positive. Stronger demand and a less restrictive financial environment are expected in the next six to twelve months.
The US Federal Reserve prepares its next meeting with the Beige Book. It is a summary of comments from the twelve regional central banks of the United States reporting on the current economic situation in their respective regions. The next meeting will take place on March 19th and 20th.
The key interest rate is currently 5.25 to 5.50 percent and the futures markets are pricing in a stable interest rate of 97 percent for the coming meeting. Many observers have so far been of one Interest rate cut in May, but recent surprises from increased economic and inflation data increase the likelihood that the first rate cut will not come until June.
(Collaboration: Andreas Plecko)
Contact the author: [email protected]
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(END) Dow Jones Newswires
March 06, 2024 2:26 p.m. ET (19:26 GMT)