Fed’s Beige Book noted that outlook generally was “positive for the coming months” with expectations of “continued modest growth”. Though, there were “widespread concerns about the possible negative impact of trade-related uncertainty”.

Employment grew at a “modest pace” but “slightly slower” than previous reporting period. Compensation grew at a “modest-to-moderate pace” but some contacts “emphasized significant increases in entry-level wages”.

Rate of price inflation was “stable to down slightly” from prior period. Districts generally saw “some increase in input costs, stemming from higher tariffs and rising labor costs”. However, the ability to pass on to final prices was “restrained by brisk competition”.

Full report here.

Chicago Fed President Charles Evans, probably most dovish FOMC member, said “on the basis of inflation alone, I could feel confident in arguing for a couple of rate cuts before the end of the year.”

He said in a CNBC interview yesterday that “in order to get inflation up to 2.25% over the next three years, I need 50 basis points of more accommodation.” And, “maybe that’s not quite enough”.

Though, he also acknowledged that the economy is “doing well” and “we are ten years into an expansion.” But after missing the inflation target for a decade, “two and a quarter or a little bit more would be about appropriate.”

Dallas Fed President Robert Kaplan said yesterday that “the best argument” for him to support rate cut is the “shape” of the yield curve, inversion. And, a “tactical” reduction of a quarter point could address the risks seen by bond investors.

He also said that inflation is likely to remain low because of the change in the economy and the link between wages and prices. He added businesses are not able to pass on higher costs to customers because of stiff competition. They have to absorb lower profits so they don’t lose market share.

Separately, San Francisco Fed President Mary Daly said she’s not leaning one way or the other on July interest rate decision. And, she will learn a lot in the next two months regarding whether rates would be lower by year end.

On the one hand, she noted it’s too early to tell if additional stimulus was needed. And she saw no clouds looming on consumer spending and labor market. On the other hand, Daly noted business felt uncertain. She saw potpourri of headwinds, including trade, mood, uncertainty, global slowdown.

Fed Chair Jerome Powell’s speech in Paris on Tuesday was largely similar to what he’s said recently. He reiterated the pledged to “act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2 percent objective.”

In the baseline outlook, Fed expected growth to “remain solid, labor markets to stay strong, and inflation to move back up and run near 2 percent”. However, “uncertainties about this outlook have increased”, particularly regarding “trade developments and global growth”.

Powell also noted the influences between monetary policies in different countries, “financial markets, trade, and confidence channels”. And he noted, “pursuing our domestic mandates in this new world requires that we understand the anticipated effects of these interconnections and incorporate them into our policy decision making.