Fed's Beige Book reveals tariff uncertainty worsens economic outlook

By Mucahithan Avcioglu

ISTANBUL (AA) - The US Federal Reserve's Beige Book reported Wednesday that the uncertainty caused by tariffs had a negative impact on the economic outlook.

"The outlook in several Districts worsened considerably as economic uncertainty, particularly surrounding tariffs, rose," it said.

The report, with analysis from the Fed's 12 branches, said economic activity was little changed since the previous report, "but uncertainty around international trade policy was pervasive across reports."

Most of the 12 districts noted that firms expected elevated input cost growth resulting from tariffs.

The report noted that, despite widespread uncertainty about international trade policy, non-auto consumer spending was generally lower, but most regions saw moderate or strong sales of consumer goods, which were linked to nervousness about tariff-related price hikes.

"Many firms have already received notices from suppliers that costs would be increasing. Firms reported adding tariff surcharges or shortening pricing horizons to account for uncertain trade policy. Most businesses expected to pass through additional costs to customers," it said.

It also noted that employment was little changed or increased slightly in most districts, while wages generally increased at a moderate rate, with wage growth slowing in many regions compared to the previous report.