“Several districts reported growing signs of a slowdown in demand, and contacts in five districts pointed to concerns about a heightened risk of a recession,” the Fed said in its survey, known as the “Beige Book,” which was conducted on its 12 districts until July 13.
The Department of Labor reported Wednesday that consumer prices increased 9.1% in June at an annual rate driven by higher costs for gasoline, food, rent and other items.
Raphael Bostic, president of the Atlanta Fed, said higher-than-expected inflation in June could require a 100-basis-point hike at this month’s policy meeting. “Everything is at stake,” he told reporters.
Although he acknowledged that the report needs to be studied more closely, “today’s numbers suggest that the trajectory is not moving in a positive way… How much do I need to adapt is really the next question,” he said.
Fed officials are keeping an eye on comments from business contacts across the country as they weigh the economic outlook.
The report also noted that substantial price increases were reported in all districts and that “most contacts expect price pressures to persist at least through the end of the year.”
