By Yasin Ebrahim
Investing.com -- Economic activity was little changed in recent weeks, though there were signs that inflation was cooling just as the recent banking turmoil sapped lending activity, according to the Federal Reserve's Beige Book released Wednesday.
“Overall economic activity was little changed in recent weeks, [with] expectations for future growth were mostly unchanged,” the Fed said in its Beige Book economic report, based on anecdotal information collected by the Fed's 12 reserve banks through Apr. 10.
Following the recent turmoil in banking, meanwhile, "lending volumes and loan demand generally declined across consumer and business loan types," the report said. "Several districts noted that “banks tightened lending standards amid increased uncertainty and concerns about liquidity,” it added.
Signs of tighter lending standards have been closely watched in recent weeks amid market bets that reduced lending activity will curb economic growth and help the Fed in its fight against inflation.
But while the pace of inflation rose modestly during the reporting period, the report says, the rate of “price increases appeared to be slowing, [driven by] modest-to-sharp declines in the prices of nonlabor inputs and significantly lower freight costs in recent weeks.”
The tight labor market, which is a concern for the Fed as it threatens to boost wages appears to be moderating somewhat, as “several districts reported a slower pace of growth than in recent Beige Book reports,” the report showed.