Fed’s Beige Book: Rising prices due to tariffs, trade worries shine the spotlight
Federal Reserve Chairman Jerome Powell said President Donald Trump’s tariffs were higher than expected, raising the risk of further inflation.
New reports from Federal Reserve System US companies have shown that they are reporting increased costs due to tariffs.
On Wednesday, the Federal Reserve issued the latest version of the Beige Book, which is published eight times a year, summarizing the economic situation of each of the Fed’s 12 regional districts. Uncertainty about international trade policy is “wide” and concerns about tariffs on imported goods, which president is it? Donald Trump His efforts to readjustify global trade are increasing, with costs rising for both businesses and consumers.
“Most districts said businesses expect an increase in production costs due to tariffs. Many companies have already received notifications from suppliers with increased costs,” the Fed’s national summary said. “Companies reported adding additional tariff charges or shortening the range of pricing to explain uncertain trade policies.”
“Most companies expect to pass additional costs to consumers, but there have been reports on margin compression amid rising costs, especially in consumer-oriented companies, as demand remained lukewarm in some sectors,” he added.
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Taxes are taxes on imports paid by importers, which often pass higher costs to consumers at higher prices. (Getty Images/Sam Wolf via Getty Images/Bloomberg)
In the Boston area, the Fed noted that retail and manufacturing contacts were similarly warned. Increased cost Although linked to customs duties, yet not yet determined, it could result in a significant pass-through in production prices. ”
“The expected pass-through rate was substantial, with over half of manufacturers projecting full pass-through with little or no lag. One manufacturer reduced the price estimate period to 30 days, anticipating the need to quickly adjust prices,” he continued.
That pointed out in the Boston area.”Traveling from Canada It was noticeably declining, and contacts feared that summer trips from Europe and China could suffer as well due to negative reactions to US tariff policies. ”
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Auto dealers reported a surge in demand as consumers appeared to make purchases before tariffs were in effect and prices increased. (Frederic J. Brown/AFP via Getty Images)
The automotive industry has seen short-term boosts from at least Tariff uncertaintyreports from several Fed areas say that consumers are in a hurry to buy cars before the 25% tariff on imported cars.
“Car dealer They reported a significant increase in sales after a slight increase in past periods. Multiple contacts highlighted sales hit record highs in March. However, all of our automotive industry contacts believe this boost will elicit advances in vehicle purchases, pushing forward potential tariffs, and continue to have strong demand.
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Home builders noted the rise in costs caused by tariffs on construction materials. (Angus Mordant/Bloomberg via Getty Images)
Home builders in several Fed areas have been noted that tariffs will increase Construction Cost Uncertainty causes a slower demand.
Tariffs are also affecting Shipping business. The Richmond Fed noted that one of the ports in the district reported a “unexpected and disappointing” 25% decline in monthly export transport.
Trump administration plans to collect Port call fees for Chinese ships Supporting domestic shipbuilding has also attracted attention as a source of cost pressure.
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“The port contacts were particularly concerned about the port tax proposal for Chinese vessels, which could result in a quadruple fee for cargo handling. Some ports have already been ordered, tariffs have been enacted and now received multi-million dollar tariff invoices for Chinese cranes with tariffs,” Richmond wrote.