Fed's Beige Book: Iran war has businesses on edge

Overall economic activity increased at a slight to modest pace in eight of the twelve Federal Reserve Districts, while two Districts reported little change and two Districts reported slight to modest declines. The conflict in the Middle East was cited as a major source of uncertainty that complicated decision-making around hiring, pricing, and capital investment, with many firms adopting a wait-and-see posture. Manufacturing activity rose slightly to moderately in most Districts. Banking sector activity was generally steady with loan demand stable to up moderately. On balance, consumer spending increased slightly despite harsh winter weather in some regions and higher fuel prices. Many Districts continued to report signs of consumer financial strain, increased price sensitivity, and rising demand at food banks and other social service organizations, while spending among higher-income consumers was resilient. Housing market activity softened across several Districts as heightened uncertainty and rising mortgage rates dampened buyer demand. Commercial real estate markets improved, with strength in industrial properties, especially data center projects. Office markets saw solid demand for Class A space but weaker demand for lower-tier properties. Energy activity was up slightly as oil prices rose, though many producers remained cautious about increasing drilling due to uncertainty about the persistence of higher prices. Agricultural activity was mixed, and several Districts reported that rising crop prices helped offset steep price increases of fertilizer and fuel. Business outlooks varied amid widespread uncertainty about future conditions. FED BEIGE BOOK (DATA THRU APR 6): ECONOMIC ACTIVITY GREW AT SLIGHT TO MODEST PACE IN 8 OF 12 FED DISTRICTS; 2 FLAT, 2 REPORTED SLIGHT TO MODEST DECLINES FED BEIGE BOOK: BUSINESS OUTLOOKS MIXED AMID WIDESPREAD UNCERTAINTY; WAGES CONTINUED TO RISE ...

China’s primary aluminium production in March rose 2.7% year-on-year, official data showed on Thursday, as supply fears linked to the Iran conflict supported prices of the light metal. Aluminium production climbed to 3.85 million metric tons in March, according to data released by the National Bureau of Statistics. In the first three months of the year, ...

Good morning. It’s great to be here today. I last spoke at this event two years ago, just a few days after a total solar eclipse. Today, I’m here less than a week after the conclusion of the Artemis II moon voyage. Perhaps it has something to do with the cosmos. Now, many of you may find this surprising, but there are some similarities between the Federal Open Market Committee (FOMC) and the Artemis crew. Both are mission-focused. Both have scheduled blackout periods—although ours are not nearly as nerve-racking. And just as astronauts travel through competing gravitational forces to circle the dark side of the moon, the FOMC navigates through uncertainty as it balances the risks to achieving its dual mandate goals of maximum employment and price stability. Today I’m going to talk about those goals, the uncertainty, and the current stance of monetary policy. I’ll also give my economic outlook. Fed's Williams: Middle east war already lifting inflation Fed's Williams: Seeing emerging signs of supply chain disruptions. Fed's Williams: Swift end to conflict should help ease inflation pressures New York Fed President Williams worries war will slow growth, aggravate inflation New York Fed President John Williams expressed concern Thursday about the Iran war’s impact on the economy, saying it already has shown signs of hiking prices and slowing growth. In a speech delivered to bankers in his home district, Williams noted that the conflict has “intensified the uncertainty” around national and local conditions. While he generally expressed confidence that growth would continue and inflation would ease through the year, he said there are threats to both sides of the Fed’s dual mandate for stable prices and low unemployment. “Assuming energy supply disruptions ease reasonably soon, energy prices should come down, and these effects should partially reverse later this year,” Williams said. “However, the conflict could also result in a large supply shock with pronounced effects that simultaneously raises inflation — through a surge in intermediate costs and commodity prices — and dampens economic activity. This has begun to play out already.”