2018.01.1722:32:00UTC+00Fed’s First 2018 Beige Book Reports Modest to Moderate Economic Gains

The Federal Reserve's first Beige Book of 2018 showed the U.S. economy grew at a modest-to-moderate clip from late November through the end of 2017, while wages continue to rise.

The report, which is based on anecdotal evidence on current conditions via interviews, revealed that several Federal districts noted increases in manufacturing, construction and transportation input costs. The Fed report also said a few districts observed that companies were lifting wages in a broader range of industries and positions since the prior report. It also stated that agriculture and energy commodity prices were mixed.

Business contacts' response to the newly adopted tax bill by the Republicans were also reported, with the Beige Book referencing to the word “tax” 23 times. It showed that some were more optimistic on the overhaul than others, while others voiced concerns regarding the impact that it could have on the housing market.

It is not clear if the report will ease the Fed's worries regarding the weak inflation, which has continued to be below the central bank's 2 percent target for over five years. Despite the weak price pressures, Fed policymakers currently expect to raise interest rates three times this year. In 2017, the central bank raised rates 2017 against the backdrop of stable growth and low employment.