The latest Beige Book report from the Federal Reserve states that national economic activity continued to expand from early April to mid-May, although conditions varied across industries and districts. Commercial real estate activity saw a decline during this period due to supply concerns, tight credit conditions, and high borrowing costs.
According to the Beige Book, overall outlooks have become more pessimistic as uncertainty rises and downside risk increases. While most of the Fed’s 12 districts reported slight or modest growth in their respective economies, two noted no change in activity.
Retail spending remained stagnant or slightly increased during this time as consumers became more price sensitive and reduced discretionary spending. The Fed is set to release its personal consumption expenditures price index on Friday which will provide further insight into inflation trends.
As inflation continues above the target rate of 2%, it is expected that at its June 11-12 meeting, the Federal Open Market Committee will maintain current interest rates within their range.
