Fed Beige Book: Escalation of War Heightens Uncertainty, US Businesses Take Wait-and-See Approach

April 16 — The Federal Reserve said Wednesday in its Beige Book report that U.S. economic activity across most regions continued growing at a moderate to modest pace, even as the Iran conflict triggered fresh uncertainty and rising energy costs. While overall price increases remained moderate, energy and fuel costs rose “significantly” across all 12 Fed districts, the report noted. The central bank added that the Middle East conflict is viewed as a major source of uncertainty, complicating businesses’ decisions on hiring, pricing and capital investment — with many taking a wait-and-see approach. Compiled by the New York Fed and reflecting data through April 6, the Beige Book offers an initial look at the conflict’s impact on the U.S. economy. The conflict-driven oil price shock has lifted gasoline prices, marking the country’s largest inflation spike since 2022. Several Fed policymakers have signaled a preference to hold interest rates steady for an extended period to assess economic data. (FXStreet)