In a live response to this Federal Reserve Beige release Wednesday afternoon, Bloomberg's Federal Reserve and Economics reporter Katarina Saraiba highlighted an increasingly cautious mood across American businesses and consumers.
Saraiba said the Federal Reserve beige book is a “very similar” report to what he saw this year, pointing to a slight decline in activity and a steady labour market.
Saraiva highlighted that the uncertainty, particularly related to tensions and tariff trade, continues to consider decision-making. She added that businesses and consumers are “waiting to see how this tariff fight unfolds.”
The beige book said that tariffs totaled 122 times and that “conservatively declining economic activity” is a recurring theme in multiple regions, she noted.
Consumer spending is retained
Despite fear that tariffs will curb household spending, Saraiba said U.S. consumers are surprisingly resilient. Consumers said she was “staying strong,” and “a large part of that is in the labor market.” Retail sales increased slightly, but large ticket purchases fell.
Regarding inflation, Saraiba pointed to continued concerns with the Fed. That means that the risk of inflation expectations is unchubated. “It completely takes away the Fed's ability to control prices,” she warned. However, she noted that despite recent volatility in recent sentiment surveys, most market-based inflation measures remain stable.
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Michelle Bowman is considered a candidate for light for stable regulations
Saraiba also discussed her recent report on Michelle Bowman about the choice of President Donald Trump for the vice-chairman of US President Donald Trump. Bowman, now a Fed governor, is known for his support of lighter touch regulations and for his opposition to recent proposals on increasing capital requirements.
“Her views are very widely known…she's kind of lined up with the industry when it comes to (regulation),” Saraiba said.
She added that Bowman is still defending strict supervision and is seeking an independent review of Silicon Valley Bank's collapse.
Bowman, like the Fed's chairman, could be on the run to take over Jerome Powell, Saraiva added. She has already joined the board and has “proven a dedicated policy maker.”
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