Complacent, Yet Max USD Long (Hmm)

Economic activity increased slightly to moderately across the twelve Federal Reserve Districts in late November and December. Consumer spending moved up moderately, with most Districts reporting strong holiday sales that exceeded expectations. Vehicle sales grew modestly. Construction activity decreased overall, with several Districts indicating that high costs for materials and financing were weighing on growth. Manufacturing decreased slightly on net, and a number of Districts said manufacturers were stockpiling inventories in anticipation of higher tariffs. Residential real estate activity was unchanged on balance, as high mortgage rates continued to hold back demand. Commercial real estate sales edged up. The nonfinancial services sector grew slightly overall, with Districts highlighting growth in leisure and hospitality and transportation, notably air travel. Truck freight volumes, however, were down. Financial service providers reported modest growth in lending and little change in asset quality overall, though lenders and community organizations voiced concerns about delinquencies among small businesses and lower-income households. Nonprofit social service agencies faced high demand amidst uncertainty about future funding levels. Agricultural conditions remained weak overall, with generally lower farm incomes and weather-related struggles in some areas. The spread of avian flu reduced egg supplies and pushed up prices. Energy activity was mixed. More contacts were optimistic about the outlook for 2025 than were pessimistic about it, though contacts in several Districts expressed concerns that changes in immigration and tariff policy could negatively affect the economy. post: FED BEIGE BOOK: MORE CONTACTS WERE OPTIMISTIC ABOUT THE OUTLOOK FOR 2025 THAN WERE PESSIMISTIC ABOUT IT, THOUGH CONTACTS IN SEVERAL DISTRICTS EXPRESSED CONCERNS THAT CHANGES IN IMMIGRATION AND TARIFF POLICY COULD NEGATIVELY AFFECT THE ECONOMY. post: FED BEIGE BOOK: ECONOMIC ACTIVITY INCREASED SLIGHTLY TO MODERATELY ACROSS THE TWELVE FEDERAL RESERVE DISTRICTS IN LATE NOVEMBER AND DECEMBER. post: FED BEIGE BOOK: PRICES INCREASED MODESTLY OVERALL, WAGE GROWTH PICKED UP.