BlockBeats news: On January 15, the latest Federal Reserve Beige Book report revealed that since mid-November last year, economic activity in most U.S. regions has rebounded at a "moderate to mild" pace, showing a notable improvement compared to previous cycles. However, momentum in the labor market remains weak, with eight out of twelve regions reporting nearly stagnant employment levels. Wage growth has also retreated to a "normal and moderate" range, indicating a cooling labor market but not yet one in disarray.
It is worth noting that the sources of inflationary pressure are undergoing structural changes. The Beige Book points out that as pre-tariff inventory is gradually being consumed, companies are finding it increasingly difficult to absorb costs on their own and are beginning to pass on tariff-related expenses to final selling prices. Regions such as New York and Minneapolis further reported that rising prices have clearly squeezed corporate profits, with particularly notable increases in service-related costs such as healthcare and insurance.
This phenomenon aligns with the recent stance of several Federal Reserve officials: the economy has not yet entered a recession, and the labor market remains resilient. However, the path toward lower inflation is not smooth, especially with disruptions from tariffs and policy uncertainties making it difficult to accelerate the pace of rate cuts. The market currently widely expects that the Fed will not adjust interest rates again before the middle of the year at the earliest.
Bitunix Analyst:
The key signal from the beige book is not "economic strengthening," but rather "inflationary pressures shifting backward." As costs are officially reflected in the PPI and CPI, the Federal Reserve's policy flexibility will be constrained once again. This is also a crucial context for the ongoing revisions in global markets regarding expectations of monetary easing.