On Wednesday, two weeks before its next monetary policy announcement, the Federal Reserve issued its most recent Beige Book on the state of the economy in the major U.S. regions. A mixed assessment of the economic recovery, which slowed down in November, is presented by the survey, which will serve as the basis for the next meeting on 15-16 December.
The “Beige Book” states that the economic recovery accelerated at a “modest to moderate” pace this fall, before plummeting in November, especially in regions where cases of coronavirus have exploded in recent weeks.
The Federal Reserve has seen little or no growth in four of the 12 U.S. districts, and only modest growth in the remaining of those districts in recent weeks. In the Midwest and Northeast states, which have been hardest hit by the outbreak of the disease, the sharpest slowdown is observed and there have had to introduce new restrictions to try to contain the pandemic.
Businesses continue to optimistically judge their prospects, albeit to a lesser degree than in the previous Fed survey. Some cite with concern the imminent end of compensations received under the federal funding package voted in March.
For their part, banks have recorded worsening in their credit portfolios, particularly in the retail, hospitality and leisure sectors, and expect to see an increase in defaults.
Fed President Jerome Powell has been urging the U.S. Congress regularly in recent weeks to agree on a new strategy to help the economy, awaiting the anticipated change in the spring by population mass vaccination.
In Congress, talks between Democratic House Speaker Nancy Pelosi and Steven Mnuchin, Donald Trump’s Treasury Secretary, resumed on Tuesday after an interruption since the days leading up to the November 3 presidential election to find a consensus on a rescue package before the transition era ends.