The president of the federal reserve, Jerome Powell, said that President Donald Trump’s prices are greater than expected, which increases the risks of additional inflation.
A new report from Federal reserve have shown that American companies report increased costs due to prices, which they expect to largely transmit to consumers in the highest price form.
The Federal Reserve published its latest edition of the Beige Book on Wednesday, which summarizes the economic conditions in each of the 12 regional Fed districts and is published eight times a year. The uncertainty about international trade policy is “omnipresent” and concerns concerning prices on imported goods, this president Donald Trump has increased in its efforts to rebalance world trade, which increases costs for businesses and consumers.
“Most districts have noted that companies expected high growth in production costs resulting from prices. Many companies have already received suppliers that costs increase,” said Fed national summary. “Companies have said they added price supplements or shorten the price horizons to take into account the uncertain trade policy.”
“Most companies expected to achieve additional costs to consumers. However, there were reports on the compression of margins in the middle of increased costs, because demand remained lukewarm in certain sectors, especially for consumer-oriented companies,” he added.
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Prices are taxes on imported goods which are paid by importers who often transmit higher costs to consumers thanks to higher prices. (Sam Wolfe / Bloomberg via Getty Images / Getty Images)
In the Boston district, the Fed noted that “retail and manufacturing contacts have warned that Cost increase Linked to prices, although still to be determined, could lead to a large pass at their production prices. “”
“The expected hobby rates were substantial, with more than half of the manufacturers projecting a full pass, mainly without gap. A manufacturer has shortened the duration of its price quotes at 30 days in anticipation of the need to adjust prices quickly,” he continued.
The Boston district also noted that “Canada Travel refused significantly and the contacts feared that the trip to Europe and China can also suffer due to negative reactions to American tariff policies. “”
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Automobile dealers have declared an increase in demand while consumers sought to make purchases before prices take effect and increase prices. (Frederic J. Brown / AFP via Getty Images / Getty Images)
The automotive industry has seen at least a short -term boost of the price uncertaintyWhile consumers rushed to buy cars before 25% prices on imported cars that take effect, according to reports from several Fed districts.
“”Automobile dealerships said a sharp increase in sales after a slight increase in the last period. Several contacts stressed that sales reached a record in March. However, all our contacts in the automotive industry have given this boost to an advancement in vehicle purchases to get ahead of potential prices and do not expect the force for demand to continue, “the Fed of Philadelphia wrote.
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House manufacturers have noted cost increases due to prices on building materials. (Biting Angus / Bloomberg via Getty Images / Getty Images)
House manufacturers in several Fed districts have been noted that prices will increase Construction costs And cause a slowdown in demand due to uncertainty.
The prices also had an impact on the maritime transport industry. The Fed of Richmond noted that one of the ports of its district reported a 25% “unexpected and disappointing” drop in export expeditions from one month to the next.
The Trump administration plan to take a Port costs on Chinese ships To support interior shipbuilding, it was also noted as a source of pressure on costs.
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“Port contacts were particularly concerned about the tax on ports of port proposed on Chinese ships which, according to their estimates, could quadrup the handling costs of goods. Certain ports have received price invoices of several million dollars on Chinese cranes which have already been ordered and reduced as tariffs have been promulgated and are now subject to the price,” Richmond Fed.
