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Fed’s beige book shows uncertainty continues to hurt businesses

Illustration of hand with a disappearing $100 dollar bill.
Illustration: Eniola Odetunde/Axios

The Fed released its latest beige book on Wednesday and the biggest takeaway was that despite the excitement for the phase one trade deal, "tariffs and trade uncertainty continued to weigh on some businesses."

What it means: The beige book gathers anecdotal responses from businesses around the country to get an idea of how the economy is doing.

  • "In short, any positive burst in sentiment resulting from the accord signed [yesterday] has either not materialized, or is still to come," BMO Capital Markets rates strategist Jon Hill wrote in a note to clients.

What they're saying: “Several [businesses] increased prices of final goods but struggled with low profit margins due to tariffs on raw materials,” the report said.

  • Manufacturing activity was "essentially flat," and the report contained a number of what Hill described as "ominous details."
  • Hiring is slowing significantly, and there are some reports of declining prices.
  • Some manufacturing companies even reported job cuts.

Yes, but: The expectation of the trade deal did spur some hope. The Chicago Fed district said it had “boosted farmers’ outlooks” while the Dallas Fed said “outlooks generally improved, with reduced trade uncertainty boosting optimism.”

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