The snow may cover the ground, but the signs from the Beige Book suggest the Federal Reserve districts are pretty happy with the economy and remain concerned about inflation. Textual analysis of today’s report showed a clear rise in focus on prices and a positive assessment of the US economy. On the basis of the apparent message from today’s report, expectations of rate cuts in H1 2024 may be wound back.
Looking at the custominsed ‘Bing’ collection of ‘positive’ vs. ‘negative’ terms in the report shows an overall lift in optimistic sentiment about the economy, to the highest level since April 2022.
Mapping terms that contain ‘strong’ or ‘weak’ , or derivatives, suggests the improved outlook is a rise in confidence about the economy, rather than a decline in concern about recession.
Inflation mentions picked up well above those seen in the late November report.
While concerns about employment/unemployment rose somewhat.