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National economic activity continued to expand from early April to mid-May; however, conditions varied across industries and Districts. Most Districts reported slight or modest growth, while two noted no change in activity. Retail spending was flat to up slightly, reflecting lower discretionary spending and heightened price sensitivity among consumers. Auto sales were roughly flat, with a few Districts noting that manufacturers were offering incentives to spur sales. Travel and tourism strengthened across much of the country, boosted by increased leisure and business travel, but hospitality contacts were mixed in their outlooks for the summer season. Demand for nonfinancial services rose, and activity in transportation services was mixed, as port and rail activity increased whereas reports of trucking and freight demand varied. Nonprofits and community organizations cited continued solid demand for their services, and manufacturing activity was widely characterized as flat to up, though two Districts cited declines. Tight credit standards and high interest rates continued to constrain lending growth. Housing demand rose modestly, and single-family construction increased, though there were reports of rising rates impacting sales activity. Conditions in the commercial real estate sector softened amid supply concerns, tight credit conditions, and elevated borrowing costs. Energy activity was largely stable, whereas agricultural reports were mixed, as drought conditions eased in some Districts, but farm finances/incomes remained a concern. Overall outlooks grew somewhat more pessimistic amid reports of rising uncertainty and greater downside risks post: FED BEIGE BOOK: PRICES INCREASED AT A MODEST PACE OVER THE REPORTING PERIOD. post: FED BEIGE BOOK: OVERALL OUTLOOKS GREW SOMEWHAT MORE PESSIMISTIC AMID REPORTS OF RISING UNCERTAINTY AND GREATER DOWNSIDE RISKS. post: FED BEIGE BOOK: NATIONAL ECONOMIC ACTIVITY CONTINUED TO EXPAND FROM EARLY APRIL TO MID-MAY. HOWEVER, CONDITIONS VARIED ACROSS INDUSTRIES AND DISTRICTS. post: FED'S BEIGE BOOK: EMPLOYMENT ROSE AT A SLIGHT PACE OVERALL. EIGHT DISTRICTS REPORTED NEGLIGIBLE TO MODEST JOB GAINS,AND THE REMAINING FOUR DISTRICTS REPORTED NO CHANGES IN EMPLOYMENT.
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Weak demand for US 7-year treasuries sent Wall Street indices lower on Wednesday, on concerns that funding the US deficit will drive up yields alongside ‘higher for longer’ Fed rates. And that manifested with a higher US yields curve and a stronger USD, which enjoyed at strongest daily performance in over a month. This week I have warned of a potential ...
Sessions