According to the 'Beige Book' report published by the Federal Reserve (FED), economic activity in the United States has recorded a slight increase in recent weeks, with prices continuing to rise and a stable level of labor force employment.
Economic expectations are optimistic, with most Fed districts anticipating moderate growth in the coming months.
Although firms expect a slowdown in the pace of price increases, inflation remains a major issue, especially due to the trade tariffs imposed by the Trump administration. The report, based on data collected up to February 23, suggests that markets expect the Fed to keep interest rates unchanged at the next meeting in March, in the context of inflationary risks.
Traders estimate that any potential rate cut could occur only in July.
Additionally, the nomination of Kevin Warsh to replace Jerome Powell at the helm of the Fed could influence monetary policy, considering that Warsh is a proponent of interest rate cuts.
Observations from the report reinforce the perception that, although the labor market is stabilizing, inflation remains a challenge, with pressures on prices felt by firms and households.
Sources
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