The Federal Reserve's Beige Book flagged that the conflict involving Iran is generating measurable uncertainty among U.S. businesses, according to the latest edition of the report. The Beige Book, a periodic summary of economic conditions compiled from the Fed's twelve regional districts, reflects anecdotal intelligence from business contacts rather than hard data, making its tone a leading indicator of sentiment shifts before they appear in official statistics. Businesses cited the Iran conflict as a source of concern affecting planning and investment posture. When geopolitical risk registers in Beige Book language, it typically signals that business contacts are delaying capital expenditure decisions, reassessing supply chains, or pulling back on hiring commitments until the outlook clarifies. The Fed uses this qualitative input alongside hard data to calibrate its policy stance. Persistent uncertainty language in successive Beige Books has historically preceded softer growth readings. Analysts and investors will watch whether the conflict-driven caution broadens or deepens in the next edition, and whether it begins to show up in investment, hiring, or credit data.
US inflation hit 4.1% in May 2026, its highest level in three years, driven by rising energy prices, keeping a Federal Reserve rate hike in September firmly on the table. Consumer spending rose on tax refunds and a stock market rally, while business investment in AI equipment also rebounded.
RBI data through May 2026 shows that its 85 basis point repo rate cuts since February 2025 are only partially reaching borrowers, with lending rate transmission described as moderated. Slower pass-through limits relief for loan holders and may pressure the RBI to cut rates further to achieve its growth goals.
U.S. consumer prices rose at a 4.2% annual rate in May, the fastest pace in three years, driven by a spike in energy costs. The reading puts pressure on the Federal Reserve to respond, with potential knock-on effects for interest rates, borrowing costs, and household purchasing power.
US inflation rose to a three-year high in May, driven by surging gas and energy prices tied to the Middle East conflict. The reading complicates the Federal Reserve's path toward cutting interest rates and keeps pressure on household budgets.
