Fed releases Beige Book

Traders are keying on one statement in the book. “There were more frequent reports of intensifying wage pressures as shortages of workers persisted in all districts. Increasing input prices were noted in nearly every region.” This has many investors fearful, particularly since there is another critical employment report scheduled for release on Friday morning.

Despite the doom and gloom, the Fed also notes, however, “there were only a few reports that increases in input costs were resulting in higher prices at the retail level.” This implies there is still little evidence that oil shock inflation is filtering down to the rest of the economy.