Fed Beige Book Shows Steady Employment, Higher Inflation

• Economic activity expanded in 10 out of 12 Federal Reserve districts, an increase from the previous report.
• Inflation saw prices increasing at a moderate to strong pace across all districts, a step up from a moderate pace previously.
• The labor market is softening, with little to no change in hiring in most districts and cooling in one.
• Consumers are financially stretched, prioritizing necessities, and showing increased reliance on credit cards.
• Some FOMC presidents are becoming more hawkish, observing continued economic activity and a lack of financial market restrictiveness.

The Fed's Beige Book indicates expanding economic activity in most districts but also higher inflation, partly due to energy prices. While the labor market is softening, consumers are financially stretched and increasingly relying on credit cards. This mixed economic picture is contributing to an incrementally hawkish stance among some Fed officials.