Tariffs are pushing prices higher, and consumers are feeling the pinch, according to the Federal Reserve's Beige Book. The report reveals that President Trump's tariffs, implemented in April and continuing through the following months, are causing inflation to rise. Companies are caught in a dilemma, either absorbing the costs or passing them on to customers. The Beige Book, published eight times a year, notes that overall economic growth has remained stable, but labor markets are showing signs of weakness. Prices are rising further, with tariff-induced input costs affecting many districts. Some firms are holding prices steady to remain competitive, while others are passing on higher import costs. The trade war has intensified, with China's restrictions on rare earth materials and Trump's retaliatory tariffs. This comes at a time when economic data is scarce due to a government shutdown, but the Bureau of Labor Statistics has been called back to release the consumer price index report, which will provide crucial inflation insights before the Fed's policy meeting.
