Fed survey shows price pressures intensifying as fuel costs rise
TLT•The Fed’s Beige Book said inflation was intensifying in parts of the country, with businesses citing elevated diesel prices and fuel surcharges. Markets priced a 37% chance of a rate hike at the Fed’s October 27-28 meeting.
1. Price pressures spread
The US labor market remained in a low-hire, low-fire state, while inflation intensified across parts of the country in recent weeks, the Fed’s Beige Book said. Three of the Fed’s 12 districts described price growth as robust, eight as moderate and three as intensifying.
2. Rate outlook
Businesses reported elevated diesel prices and said fuel surcharges were passing increased costs through supply chains. The report also cited price pressures from other commodities, tariffs and insurance. The Fed raised its policy rate by a quarter of a percentage point last month to a 3.75%-4.00% range; most policymakers have indicated another hike will likely be needed this year, probably in December. Financial markets priced about a 37% chance of a hike at the October 27-28 meeting.
