MNI BRIEF: More Tariff-Linked Price Rises in Fed Beige Book

Tariff-related price increases are starting to percolate through the U.S. economy and firms warned consumer prices could climb faster by late summer, according to the Federal Reserve's latest Beige Book report published Wednesday. 

"In all 12 Districts, businesses reported experiencing modest to pronounced input cost pressures related to tariffs, especially for raw materials used in manufacturing and construction," the report said. "Many firms passed on at least a portion of cost increases to consumers through price hikes or surcharges, although some held off raising prices because of customers' growing price sensitivity, resulting in compressed profit margins. 

"Contacts in a wide range of industries expected cost pressures to remain elevated in the coming months, increasing the likelihood that consumer prices will start to rise more rapidly by late summer," the report said. (See MNI INTERVIEW: Fed Surveys Track Which Firms Will Raise Prices)