Federal Reserve Beige Book: War Escalation Increases Uncertainty, U.S. Companies Take a Wait-and-See Approach

CoinWorld News reports that the Federal Reserve stated that, as a new wave of uncertainty and rising energy costs are triggered by the Iran war, economic activity in most parts of the United States continues to grow at a moderate to modest pace. In the Beige Book released on Wednesday, the Fed noted that overall price increases remain moderate, but energy and fuel costs have “significantly” risen in all 12 Federal Reserve districts. The Federal Reserve stated: “The Middle East conflict is seen as a major source of uncertainty, increasing the complexity of businesses’ decisions on hiring, pricing, and capital investment, with many companies adopting a wait-and-see attitude.” The report, compiled by the New York Fed, is based on data up to April 6 and reflects the preliminary impact of the war on the U.S. economy. The oil price shocks caused by the conflict have driven up gasoline prices, leading to the largest March inflation increase since 2022. Several Federal Reserve policymakers have signaled a tendency to keep interest rates stable for an extended period to assess economic data.