Fx trading News: Fed Beige Book: Economic activity continued to expand modestly in the last six weeks of last year!


2020-01-17 11:10      from:CAPSTONE    author:Jack

Capstone Forex Trading News: The Federal Reserve released its latest Beige Book report on Wednesday, which showed that US economic activity continued to expand "modestly" during the last six weeks of 2019.
According to the report, the Richmond Fed and Dallas Fed's regions have higher-than-average economic growth rates. On the other hand, the economic performance of the Philadelphia Fed, St. Louis Fed and Kansas City Fed's regions was below average. Overall, the outlook for the near-term economic outlook is "still relatively favourable."
The Beige Book states that the US economy looks essentially the same as most of last year. Manufacturing activity is flat, while consumer spending is the driving force behind economic growth. Car sales were mixed, with car sales flat in a few regions.

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One thing that is new in this report is that the manufacturing, transportation and energy industries have reported layoffs. Despite this, the national job market remains tight.
Some regions reported that the rate of increase in retail prices has accelerated slightly, but is still relatively modest. Some companies are passing on the cost of tariffs to consumers. This is happening mainly in the retail industry, but also in the construction industry.
The growth rate of the US economy has been gradually slowing from an annual rate of 3% at the end of 2018. Due to concerns about this trend, the Fed took three interest rate cuts last year, reducing the benchmark interest rate by a total of 75 basis points. Therefore, many economists and Fed officials believe that the US economy will achieve a "soft landing", that is, the economic growth rate will only slow down slightly, reaching the so-called "trend" growth rate, which is estimated to be about 1.75% to 2% .
While some economists remain concerned about the economic outlook, Dallas Fed Chairman Robert Kaplan said earlier on Wednesday that he had increased confidence that the economy would avoid a sharp downturn. He also said that the Fed's recent interest rate action seemed to give investors a "green light" for buying risky assets, which is a cause for concern.
 Other interesting points in this report released today are as follows:
The St. Louis Fed said that river barge prices are falling because of lower soybean exports.
The Minneapolis Federal Reserve said Montana is suffering from harsh snow conditions, but the resort is experiencing significant capital improvements.
The Kansas City Fed said that slight improvements in agricultural prices and income are not expected to significantly improve the financial status of farmers in the area.
Energy industry sources in the Dallas Fed's area say they expect more layoffs in the industry this year.
The New York Fed says ticket prices on Broadway have risen.
The Philadelphia Fed said that the possible tariffs on European wines have caused a merchant in the region to hoard more than 35,000 cases of wine.
After the Beige Book was announced, the US stock market continued to rise as international tensions eased.
The Fed publishes a Beige Book report eight times a year, which provides anecdotal evidence of the health of the US economy and helps the Federal Open Market Committee (FOMC) assess the state of the economy. The Federal Open Market Committee will weigh the information reflected in the Beige Book report before the next monetary policy development meeting.

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