Fed Beige Book Signals Subdued Economic Growth Alongside Broadening Inflation Pressures

Economic activity slowed as the Federal Reserve's latest Beige Book showed only nine of 12 districts reporting growth, down from 10 previously. Consumer spending largely stalled and became increasingly reliant on high-income households, while middle- and lower-income families faced financial strain. Concurrently, inflation pressures intensified across regions, driven by higher oil prices, diesel costs, and fuel surcharges cited across all 12 districts. With firms struggling to pass on rising input costs to consumers, corporate margins faced compression, reinforcing expectations of tighter monetary policy ahead of the October FOMC meeting.