Fed Reports Slight to Moderate Economic Growth

The Fed Beige Book highlighted slight to moderate economic growth in late November and December, reflecting cautious optimism.

Inflation Accelerates, Labor Market Remains Strong

Consumer prices rose 2.9% year-on-year in December, marking the highest increase since July. Unemployment fell to 4.1%, underscoring labor market strength.

Trump Policies Stir Economic Uncertainty

Businesses expressed optimism for 2025 but flagged concerns about potential impacts of tariffs, tax cuts, and immigration policies.

Fed’s Rate-Cut Pace Slows

The Fed cut rates by 1% in late 2024 but signaled smaller reductions in 2025, influenced by persistent inflation and labor market resilience.

Tariffs Could Drive Future Price Increases

The Beige Book noted the potential for higher tariffs under Trump’s administration to contribute to rising prices in the coming year.

Markets Await Fed’s Next Move

Financial markets remain cautious, predicting no policy rate cuts until at least June as the Fed assesses economic impacts.