Fed’s Beige Book report noted that the “overall economic activity increased slightly since late May.” Notably, the level of economic development varied across the twelve districts, with five districts reporting growth, five noticing no change, and two marking modest declines.

The Beige Book described a cautiously optimistic picture for the future, stating that “overall economic expectations for the coming months generally continued to call for slow growth.”

Despite the uneven growth rate, the districts generally agreed on the direction of price changes. The report noted that “prices increased at a modest pace overall, and several districts noted some slowing in the pace of increase.”

Looking ahead, the report suggests that the “price expectations were generally stable or lower over the next several months”.

The employment situation was characterized by a modest rise, with the Beige Book stating that “employment increased modestly this period, with most districts experiencing some job growth.”

Full Fed Beige Book report here.

Atlanta Fed President Raphael Bostic projected a sense of confidence in the current monetary policies during his speech on Monday, suggesting the potential for patience as restrictive strategy seems to be yielding desired outcomes.

Bostic noted, “I have the view that we can be patient — our policy right now is clearly in the restrictive territory,” adding that the economy’s signs of slowing down indicate that the policy is achieving its intended effect.

The Atlanta Fed President pointed out that underlying data for prices “is actually telling a very positive story.” Bostic believes that momentum is building in the disinflationary trend, stating, “We have got that momentum going. You could see inflation getting back to 2% without having to do more.”

Despite his overall optimistic outlook, Bostic did note that he would be concerned if expectations for consumer-price increases became “unanchored.” This situation would necessitate further action from policymakers. However, he expressed confidence that “inflation is still moving steadily back to target” and that inflation expectations are centered around 2%.

Bostic summed up his stance by stating, “I am comfortable being patient.”

San Francisco Fed President Mary Daly acknowledged that while inflation appears to be slowing, it remains far too elevated. In an interview held at the Brookings Institution in Washington, D.C., Daly indicated the need for further measures to counteract inflationary pressures.

She affirmed, “I think it’s a very reasonable projection to say a couple of more rate hikes will be necessary.”

Daly reflected on the resilience of the U.S. economy, which has shown surprising strength despite ongoing economic challenges. The robust data, according to Daly, signal a clear need for intervention: “We need to raise rates to bridle that economy more.”

“With labor market still strong, inflation high, risks of doing too little are outweighing risks of doing too much,” she added.

Nevertheless, “It’s appropriate to slow the pace of rate hikes.”

In a speech delivered today, Cleveland Fed President Loretta Mester expressed surprise at the resilience shown by the economy which, in her words, “has shown more underlying strength than anticipated earlier this year.” However, Mester also raised concerns regarding the stubbornly high inflation rates, noting that “progress on core inflation [has been] stalling.”

“In order to ensure that inflation is on a sustainable and timely path back to 2%,” she said, “my view is that the funds rate will need to move up somewhat further from its current level and then hold there for a while as we accumulate more information on how the economy is evolving.”

Mester also touched on labor market’s imbalance during reopening, where she noted that “labor demand well outpaced labor supply, putting upward pressure on wages and price inflation.” Although she sees progress in achieving a more balanced situation, she cautioned that “it is slow progress and demand is still outpacing supply.”

Despite these challenges, Mester revealed a streak of optimism in the business community. She said that most business leaders “think there won’t be a recession this year, and many think that, even if demand slows down some more, a recession will be avoided or will be very mild.”