Fed Beige Book Points to Uncertainty and Increased Business Costs

By SBE Council at 17 April, 2026, 9:17 am

by Raymond J. Keating –

The latest Federal Reserve Beige Book take on the economy pointed to sluggishness and uncertainty, with the Iran war naturally coming into the equation.

Specifically, it was reported, “Overall economic activity increased at a slight to modest pace in eight of the twelve Federal Reserve Districts, while two Districts reported little change and two Districts reported slight to modest declines. The conflict in the Middle East was cited as a major source of uncertainty that complicated decision-making around hiring, pricing, and capital investment, with many firms adopting a wait-and-see posture.”

The Beige Book assessment across 12 Federal Reserve districts is based on information from Fed district bank and branch directors, and from interviews of business contacts, economists, market observers and others. The latest report was based on information collected on or before April 6, 2026.

The story on consumers pointed to growing worries. It was noted that “consumer spending increased slightly,” but “many Districts continued to report signs of consumer financial strain, increased price sensitivity, and rising demand at food banks and other social service organizations.” At the same time, “spending among higher-income consumers was resilient.”

What came through perhaps most clearly in this report were challenges in terms of business costs. The Fed explained:

“Generally, input cost increases outpaced selling price growth, compressing margins. Energy and fuel costs rose sharply in all Districts, attributed to the Middle East conflict, leading to higher freight and shipping costs and higher prices for plastics, fertilizers, and other petroleum-based products. Input cost pressures beyond energy-related increases were also widespread. Several Districts reported rising prices for metals due to tariffs, such as steel, copper, and aluminum. Technology costs rose for both hardware and software. Insurance premiums and health care costs continued to climb.”

That all speaks to the state of inflation, underlying causes, and how rising costs are affecting businesses.

In the end, it was noted, “Business outlooks varied amid widespread uncertainty about future conditions.”

No doubt, certainty matters. But in terms of spurring entrepreneurship, business, innovation, and investment, it’s obviously preferred that such certainty is about positive economic and policy developments, including pro-growth efforts such as lower taxes, deregulation, free trade, limited government spending and interference, sound property rights, impartially enforcing the Constitution and the law, and a Fed focused on price stability.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. He is the author of “The Weekly Economist” book series, and 10 Points from Walt Disney on Entrepreneurship.