US Fed ‘slightly optimistic’ about US economy

The Federal Reserve is “slightly optimistic” about the US economy shortly. While economic activity has risen slightly albeit unevenly and employment has increased since mid-January, prices have increased modestly, the Federal Reserve said.

Businesses and households express continued optimism even as uncertainty rises about how President Donald Trump’s policies will affect future growth, labor demand, and prices.

The US central bank summarized its observations from the commercial and community contacts, "Overall expectations for economic activity over the coming months were slightly optimistic."

Known collectively as the "Beige Book," the document provides a snapshot of the nation's economic experience and mood two weeks ahead of each Fed policy meeting. Compared with January, it reflected growing anxiety among businesses across most districts about how Trump's plans to increase import duties and restrict immigration could affect demand and prices, a Reuters report said.

US central bankers have signaled for now that they will keep the benchmark overnight interest rate in the current 4.25 per cent-4.5 per cent range at their March 18-19 meeting. They want to keep downward pressure on inflation that is making slow but bumpy progress toward their 2 per cent goal, and they view the labor market as healthy and not in need of the support that a rate reduction could deliver.

They also want to see how the Trump administration's policies, including tariffs but also tax cuts, immigration restrictions, and cuts to federal jobs and spending, will affect the economy in the coming months.

Fed policymakers say that observations directly from communities and businesses can be particularly informative when the economy may be changing quickly, as data in official reports often lags reality by weeks and months.