Fed's Beige Book: Fed to stay on hold - UOB

Analysts at UOB ofered a break down of the Fed's Beige Book report.

Key Quotes:

"More formally called the Summary of Commentary on Current Economic Conditions, (14 Jul, 2am Singapore time) noted that “Economic activity continued to expand at a modest pace across most regions…the [US] outlook was generally positive across broad segments of the economy including retail sales, manufacturing, and real estate…Districts reporting on overall growth expect it to remain modest.” Inflation remained on its prolonged muted path as “price pressures remained slight.”

The report noted that most of the Fed’s 12 districts reported a slowdown in auto sales although sales still remained at “fairly high levels” while manufacturing “generally improved” across most districts and the US housing market remained a source of support for the US recovery as it continued to strengthen. The report also saw the potential fallout from UK’s Brexit decision to be modest even though the unexpected Brexit decision is causing some concerns among businesses in certain pockets of the US. Overall, the report did not change expectations that the Fed will hold its policy rate unchanged again at the upcoming 26/27 July FOMC."