Fed's Beige Book Reports Modest Economic Growth, But Concerns Rise

Fed's Beige Book Reports Modest Economic Growth, But Concerns Rise

The US Federal Reserve released its Beige Book, a report on economic conditions in the Fed's 12 districts, which found that economic activity in the US continued to expand from early April to mid-May. The report said that "most districts reported slight to modest growth" and that "overall, employment increased modestly. Eight districts reported slight job gains, while four districts reported no change in employment." However, the report also noted that uncertainty and downside risks to the economic outlook have increased and that pessimistic sentiment has risen. The Beige Book is a qualitative assessment of economic conditions based on anecdotal information gathered by the Fed's 12 regional banks. It is released eight times a year, two weeks before each meeting of the Federal Open Market Committee (FOMC), which sets interest rates. The latest Beige Book suggests that the US economy is continuing to grow, but that growth is slowing. This is consistent with other recent economic data, which have shown that the economy is growing at a below-trend pace. The Fed is expected to raise interest rates at its next meeting in June. However, the Beige Book's findings suggest that the Fed may be cautious about raising rates too quickly, as the economy is still facing some headwinds.