Rising tariffs and economic uncertainty weigh on US business activity — Fed’s Beige Book

The US Federal Reserve (Fed) has released its latest Beige Book, revealing a slowdown in economic activity across several regions of the country. Reuters reports that new tariffs enacted by President Donald Trump have led to higher consumer prices and a more pessimistic outlook for businesses.

Faced with growing uncertainty, many companies are delaying long-term investments and warning customers of potential product cost hikes. Suppliers, confronted with new trade barriers, are being forced to adjust their prices almost daily, further complicating business planning.

Companies surveyed by the Fed are bracing for adverse developments, with some already announcing plans to reduce their workforce due to rising costs and falling demand.

After the report came out, Jerome Powell, who heads the central bank, expressed that the regulator is closely monitoring the situation but will stay away from any drastic changes in interest rates. Meanwhile, financial markets expect the Fed to cut them as early as June following worsening economic data, Reuters said.