Fed Beige Book Shows Steady Employment, Higher Inflation

Summary

Stuart Paul discusses the Fed's Beige Book for June, noting economic activity expanded in 10 of 12 districts, inflation rose to moderate/strong, and the labor market softened. Consumer spending is fragile, with households stretched thin by high gas prices and relying on credit cards and tax refunds.

• Economic activity expanded in 10 of 12 Fed districts, up from 8 in April.
• Inflation increased from moderate to moderate/strong across all districts, driven partly by energy prices.
• Labor market activity showed little change, with only one district cooling.
• Consumers are financially stretched, focusing on necessities and relying on credit cards.
• Tax refunds provided temporary support to consumer spending.
• Fed officials like Kashkari, Logan, and Hammock are noted as incrementally hawkish.