The Federal Reserve (Fed) released its Beige Book report yesterday, stating that overall economic activity in the United States is showing growth. However, this growth has indirectly led to changes in consumer habits, which the Beige Book presents as a pessimistic summary of the overall economic activity in the country.
In order to curb the persistently high inflation figures, the Fed decided in early May to keep the federal benchmark interest rate unchanged in the range of 5.25% to 5.5%, achieving a six-month freeze on rates. However, the prolonged high-interest rate policy not only puts financial institutions under pressure of collapse but also indirectly changes consumer habits.
In this context, the Fed released the Beige Book yesterday, which states that the economic activity of the US population continued to expand from early April to mid-May, with most regions experiencing “slight or moderate” growth. However, this expansion not only led to rising commodity prices but also forced consumers to change their consumption habits.
Furthermore, the Beige Book provides a pessimistic description to summarize the overall economic activity in the US:
“The Beige Book is an annual report released by the Federal Reserve Board on the economic conditions in the United States. It is published eight times a year and must be released before the Federal Open Market Committee meetings. The Beige Book includes summaries of regional economic conditions from the 12 Federal Reserve Districts and the national economic conditions in the US.”
Federal Reserve officials: The fourth quarter may be the time for interest rate cuts
On the other hand, Raphael Bostic, President of the Federal Reserve Bank of Atlanta, stated at a conference in Atlanta yesterday that there is still a long way to go in order to curb the significant price increases seen in recent years.
However, despite the current high level of market inflation, Bostic believes that various indicators, primarily focusing on slowing inflation, may prompt the Fed to consider interest rate cuts in the fourth quarter of this year.
(related reports)
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