financetom
Economy
financetom
/
Economy
/
US economic activity and inflation both up in recent weeks, Fed survey shows
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
US economic activity and inflation both up in recent weeks, Fed survey shows
Jun 3, 2026 11:21 AM

June 3 (Reuters) - U.S. economic activity increased a bit in recent weeks, employment was little changed, and the fallout from higher energy prices due to the war in the Middle East was pervasive, the Federal Reserve said on Wednesday, two weeks before Kevin Warsh convenes his first policy meeting as head of the U.S. central bank.

"Business outlooks for the next six months were reported to have little change in anticipated growth, as elevated uncertainty and signs of weakening consumer spending weighed on sentiment," the Fed said in its latest "Beige Book" report, a roundup of qualitative economic data from across the country that policymakers use to help inform their understanding of the economy and their policy decisions.

"Districts noted that energy-related costs tied to the conflict in the Middle East were the primary driver of inflationary pressures, with spillovers into shipping, packaging, groceries, and fertilizer," it said.

Warsh replaced Jerome Powell as Fed chief in late May just as many central bank policymakers were starting to get more nervous about inflation, which has reaccelerated in recent months, in part due to the U.S.-backed war with Iran. Inflation has been above the Fed's 2% target for more than five years.

The sense within the Fed, based on public comments from policymakers as well as the minutes from its April 28-29 meeting, has shifted away from a shared expectation for an interest rate cut later this year to a growing feeling that a long hold at the current rate setting, or even a hike in borrowing costs, may be in order.

Inflation by the Fed's targeted measure jumped to 3.8% in April from 3.5% in March, while the labor market, which looked to be faltering last year as the Fed cut rates in response, has appeared to stabilize. Economists polled by Reuters expect the unemployment rate to remain at 4.3% when the U.S. government releases its jobs report for May on Friday.

President Donald Trump picked Warsh on the explicit expectation that he would cut rates, but has backed off his demand that it be done immediately due to the recent surge in gasoline prices.

The accounts in the latest Beige Book may add weight to the arguments within the Fed against cutting the policy rate, which the central bank has held in the 3.50%-3.75% range throughout this year.

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
Fintech companies caught up in tariff turmoil
Fintech companies caught up in tariff turmoil
Apr 7, 2025
(Reuters) -Financial technology companies like Robinhood and buy now, pay later provider Affirm have been caught in the whirlwind of President Donald Trump's sweeping tariffs, sending shares sharply downward amid fears about worsening consumer finances. Global markets have been battered since Trump last week introduced a new baseline 10% U.S. tariff on goods from all economies. Investors fear that the...
Fed's Goolsbee says there's a lot of anxiety over tariffs
Fed's Goolsbee says there's a lot of anxiety over tariffs
Apr 7, 2025
(Reuters) - Chicago Federal Reserve Bank President Austan Goolsbee on Monday said businesses are anxious about U.S. President Donald Trump's tariffs but that the central bank would need to look at hard data in its policy response. The anxiety is if these tariffs are as big as what are threatened on the U.S. side, and if there's massive retaliation, and...
BlackRock CEO Larry Fink Warns 'Many Already Believe The US Is In A Recession'
BlackRock CEO Larry Fink Warns 'Many Already Believe The US Is In A Recession'
Apr 7, 2025
BlackRock CEO Larry Fink warned that financial markets could face an additional 20% decline, but emphasized that the current correction presents a long-term buying opportunity rather than a signal to exit positions. What Happened: Speaking at the Economic Club of New York on Monday, Fink said the downturn is not indicative of systemic financial risk. “I see it more as...
China sticks to its guns as fresh US tariff threat pushes tensions to the brink
China sticks to its guns as fresh US tariff threat pushes tensions to the brink
Apr 8, 2025
* China vows 'fight to the end' if US hikes tariffs further * Trump threatens China with additional 50% duty * Tariffs make for battle of wills, not economics, analyst says By Joe Cash and Nicoco Chan BEIJING/SHANGHAI, April 8 (Reuters) - China vowed on Tuesday to fight to the end against U.S. tariffs as some citizens railed against President...
Copyright 2023-2026 - www.financetom.com All Rights Reserved