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HomeEconomyEconomic outlook worsens as rates rise, inflation bites: Fed's Beige Book

Economic outlook worsens as rates rise, inflation bites: Fed's Beige Book

by Yasin Ebrahim — According to the Federal Reserve’s Beige Book released Wednesday.

“Net economic activity has expanded moderately since the last report,” although [o] the outlook has become more pessimistic amid growing concerns about economic growth,” the Fed said in a statement. In its Beige Book economic report, it said it was based on anecdotal information collected by the Federal Reserve 12 Reserve Bank as of October 7.

But Some economies outperformed others under varying degrees of rising interest rates and inflation .

“Activity was flat in four districts and declined in two, with slower or weaker demand attributed to rising interest rates, inflation and supply disruptions.

Inflation continues to run well above the Fed’s 2% target, despite some optimism about “overall moderate” price increases ahead, the report said. Retention difficulties have eased”, but remain.

Despite this, wages are expected to “continue to grow, as higher wages remain critical for talent retention in the current environment

Signs of persistent above-trend inflation have been bets that the Fed will stick with aggressive rate hikes.

Over 90% of traders expect the Fed to raise rates by 0.12% in November’s Fed Rate Monitor Tool.

“Faced with persistent core inflation pressures, the Fed is expected to continue to outpace initial expectations,” Morgan Stanley said in a note, expecting the Fed to raise rates in November 50 basis points, December hike 50 basis points, and 25 basis points in January.



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