The Fed’s latest Beige Book indicates economic activity has remained stable since the previous report, but uncertainty about international trade policy is “pervasive” across all regions. Key findings include strong auto sales as consumers purchased ahead of tariffs, while non-auto spending declined. Both domestic and international tourism dropped, potentially signaling trouble for the travel sector. Many businesses are delaying hiring decisions due to tariff concerns. Economic decline reports doubled from two to four districts since the last assessment. Price increases were widespread, with businesses expecting tariff-driven cost increases.
What’s the bottom line?
The Beige Book, published eight times yearly before Federal Open Market Committee meetings, offers qualitative insights from all 12 Federal Reserve districts. This report – the first reflecting recently implemented broad tariffs –mentioned tariffs 107 times (more than double the previous report), highlighting how trade uncertainty dominates economic concerns.