Fed's Biege Book: Most Federal Reserve districts “indicating slight to modest growth

The Federal Reserve's Beige Book report is out and states that the US economy continued to grow in recent weeks, with most Federal Reserve districts "indicating slight to modest growth," down from the "moderate" activity reported in the April.

Effects of higher interest rates and inflation are beginning to show up. Four districts noted that the pace of growth had slowed since the prior period. "Retail contacts noted some softening as consumers faced higher prices, and residential real estate contacts observed weakness as buyers faced high prices and rising interest rates," the report said.

Perhaps more notable, eight of the Fed's 12 districts said expectations of future growth had diminished. Contacts in three of those districts specifically voiced concerns about a recession.

Key notes

• More than half of the districts cited some customer pushback on higher prices.
• Contacts in 2 districts noted rapid price increases continuing; 3 observed it had moderated somewhat.
• While firms generally anticipate wages to rise further over next year, one district indicated firms' expected wage growth has fallen 2 consecutive quarters.
• More than half of the districts cited some customer pushback on higher prices.
• Contacts in 2 districts noted rapid price increases continuing; 3 observed it had moderated somewhat.
• While firms generally anticipate wages to rise further over next year, one district indicated firms' expected wage growth has fallen 2 consecutive quarters.

US dollar update

Meanwhile, the US dollar is higher, lifted by higher Treasury yields as global inflation worries flared anew. The dollar index (DXY), which measures the currency against six major peers, is rising by 0.77% to 102.567 at the time of print, extending Tuesday's gains.

The DXY is reaching into an area of daily resistance where a correction could be on the cards on this hourly chart where the 61.8% ratio meets prior resistance.