Fed Beige Book Signals Modest Economic Slowdown Amid Trade Uncertainties

The Federal Reserve's latest Beige Book reveals a cautiously slowing U.S. economy, with trade tensions casting a shadow over business decisions. Economic activity declined modestly across multiple districts, marking a continuation of trends observed throughout 2024. The labor market remains stable—a key pillar supporting consumer resilience despite tariff concerns.

Tariffs were mentioned 122 times in the report, reflecting their outsized impact on economic sentiment. Businesses and consumers appear to be in a holding pattern, awaiting clarity on trade disputes. Retail sales showed slight growth, though big-ticket purchases weakened—a potential early warning sign of cautious spending.

Inflation expectations remain a focal point for policymakers. While current measures stay anchored, the Fed maintains vigilance against destabilizing price dynamics. The report underscores the delicate balance between cooling economic activity and sustaining growth momentum.