Fed’s Beige Book shows consumer strain amid rising prices in World Economy News 05/06/2026 The Federal Reserve released its latest Beige Book report on Wednesday, showing an economy supported by business investment but facing consumer pressure, weak job growth and increasing prices as new Chairman Kevin Warsh prepares for his first policy meeting in two weeks. The report, which compiles economic data from across the country to inform policy decisions, said business outlooks for the next six months showed little change in expected growth. Elevated uncertainty and signs of weakening consumer spending weighed on sentiment, according to the Fed. Energy costs tied to the conflict in the Middle East drove inflationary pressures, with effects spreading to shipping, packaging, groceries and fertilizer, the report said. The oil shock’s impact is becoming visible, with consumers shifting to hybrid car purchases. The report also noted limited apple supplies in New York state because fertilizer had become too expensive to use. A contact told the Kansas City Fed that middle-income households are squeezing more life out of every dollar before deciding to spend it. Warsh replaced Jerome Powell as Fed chief in late May as many central bank policymakers grew more concerned about inflation, which has accelerated in recent months partly due to the U.S.-backed war with Iran. Inflation has remained above the Fed’s 2% target for more than five years. The sentiment within the central bank has shifted from expecting an interest rate cut later this year to a growing view that a prolonged hold at current rates, or even a rate increase, may be needed, based on public comments from policymakers and minutes from the April 28-29 meeting. Inflation measured by the Fed’s targeted gauge jumped to 3.8% in April from 3.5% in March. The labor market, which appeared to weaken last year when the Fed cut rates, has stabilized. Economists polled by Reuters expect the unemployment rate to hold at 4.3% when