Fed’s Beige Book signals US business climate worsening due to Trump’s policies

According to the latest release of the Federal Reserve’s Beige Book, business sentiment in the US remained neutral to slightly pessimistic. American companies noted that stricter immigration policies under President Donald Trump have contributed to labor shortages, adding pressure to an already challenging environment. Respondents also warned that rising costs due to import tariffs are likely to persist in the coming months, potentially fueling an inflation spike by late summer.

The Beige Book shows that Trump's trade policies have impacted every district of the United States. Only a handful of companies reported positive effects, such as the reshoring of manufacturing. Meanwhile, many have already faced price increases or expect them in the near future.

At the same time, many US companies are holding off on major hiring decisions due to ongoing uncertainty, the Fed said. Trump’s tougher immigration policies have also taken a toll on businesses across multiple regions. Construction and landscaping firms have been hit particularly hard, grappling with severe labor shortages, prompting some companies to cancel projects altogether.