Economic momentum slows as outlook sours further, Fed's Beige Book
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By Yasin Ebrahim
Investing.com -- The economy continues to lose momentum and the outlook is paved with "increased pessimism," weighed down by rising interest rates and red-hot inflation, according to the Federal Reserve's Beige Book released Wednesday.
"Economic activity was about flat or up slightly since the previous report, down from the modest average pace of growth in the prior Beige Book period," the Fed said in its Beige Book economic report, based on anecdotal information collected by the Fed's 12 reserve banks through Nov. 23.
Rising interest rates and higher inflation, meanwhile, soured sentiment on the economic outlook, as "many contacts expressed greater uncertainty or increased pessimism concerning the outlook," the report added.
The demand and supply imbalance in the labor market, which has driven wage pressures and inflation, has eased, though remains tight as firms, wary of hiring difficulties, are reluctant to cut jobs.
On the inflation front, meanwhile, consumer prices rose at a moderate or strong pace in most districts, according to the report, but slowed overall driven by a "combination of improvements in supply chains and weakening demand."
The report comes on the heels of remarks from Fed chairman Jerome Powell who said Wednesday the pace of rate hikes could slow as soon as next month. The fed chief, however, added that rates had long a way to go to reach peak levels.
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