Fed's Beige Book: Price increases ahead of tariffs could spell trouble for inflation

The Federal Reserve's (Fed) Summary of Commentary on Current Economic Conditions by Federal Reserve District, colloquially known as the Beige Book, is a collection of anecdotal information regarding inflation, employment, and general economic conditions within each Fed Bank's district. The Beige Book is collected and publicized eight times per year, released roughly two weeks before each Fed rate decision.

The Beige Book is broadly considered the least-impactful of the three 'Books' distributed by the Fed, however the Beige Book is the only version that is publicly-available. Normally a no-noteworthy release, March's Beige Book is carrying additional weight as US President Donald Trump's trade war aspirations are starting to produce cracks within the US economy well before they've reached their full effect, or even fully implemented.

Key highlights

Overall expectations for economic activity over the coming months were slightly optimistic.

Prices increased moderately in most districts, but several districts reported an uptick in the pace of increase relative to the previous reporting period.

US economic activity rose slightly since mid-January.

Employment was slightly higher on balance, with stricts mixed.

Wages rose at a modest to moderate pace, prices went up moderately.

Contacts in most districts expected potential tariffs on inputs would lead them to raise prices, with isolated reports of firms raising prices preemptively.