In a live reaction to the Federal Reserveâs Beige Book release Wednesday afternoon, Bloombergâs Federal Reserve and economics reporter Catarina Saraiva highlighted an increasingly cautious mood across U.S. businesses and consumers.
Saraiva stated the Federal Reserveâs Beige Book is âpretty similarâ report to what we have seen this year, pointing to slight declines in activity and a labor market holding steady.
Saraiva emphasized how uncertainty, particularly tied to trade tensions and tariffs, continues to weigh on decision-making. She added that businesses and consumers âare kind of waiting to see how this tariff fight plays out.â
The Beige Book mentioned tariffs a total of 122 times, and that âeconomic activity declining modestlyâ was a recurring theme across multiple regions, she noted.
Despite fears that tariffs would depress household spending, Saraiva said U.S. consumers have remained surprisingly resilient. The consumer, she said âhas stayed strongâ and a âbig part of that is the labor market.â Retail sales increased slightly, but thereâs been a drop in big-ticket purchases.
On inflation, Saraiva pointed to an ongoing concern at the Fed: the risk of inflation expectations becoming unanchored. âThat completely takes away the Fedâs ability to control prices,â she warned. However, she noted that most market-based inflation measures remain stable, despite some recent volatility in sentiment surveys.
Saraiva also discussed her recent reporting on Michelle Bowman, U.S. President Donald Trumpâs pick for the Federal Reserveâs Vice Chair for Supervision. Bowman, currently a Fed governor, is known for her support of lighter-touch regulation and opposition to recent proposals for increased capital requirements.
âHer views are very widely known⦠sheâs kind of aligned with the industry when it comes to [regulation],â Saraiva said.
She added that Bowman still advocates for rigorous supervision and has called for an independent review of the Silicon Valley Bank collapse.
Bowman could also be in the running to succeed Jerome Powell as Fed Chair, Saraiva added. Sheâs already on the board and has âproven herself to be a dedicated policymaker.â