Federal Reserve's latest Beige Book: Behind the economic warming, tariff pressures are gradually shifting towards the consumer side

【ChainNews】The latest Federal Reserve Beige Book reveals an interesting phenomenon: economic activity is warming up.

Out of the 12 Federal Reserve districts, 8 regions are experiencing economic growth at a slight to moderate level, a significant improvement compared to the past three cycles. 3 regions are flat, and only 1 region shows a slight decline. This gradual positive trend is also reflected in business confidence—most regions are optimistic about the economic outlook in the coming months, expecting modest to moderate growth.

The performance on the consumer side has boosted market confidence. Driven by the holiday shopping season, most banks report slight to moderate increases in consumer spending. Hiring has stabilized, with recruitment activity in 8 regions remaining largely unchanged.

But there is a detail worth noting—the price level. The vast majority of regions report moderate inflation, with only two regions experiencing slight increases. Does this mean inflationary pressures are easing? Not so fast. The report also exposes a common pain point: tariffs.

All regions are concerned about the costs associated with tariffs. As companies gradually deplete their previously stockpiled inventories, they are beginning to pass these additional costs onto consumers. This means that although inflationary pressures currently appear moderate, potential risks are accumulating. Once inventories are cleared, we’ll need to keep an eye on where prices go.