Beige Book On Prices

Most Districts expected similar pace of price increases but several noted greater price sensitivity by consumers than previously. Relatively little reaction in Treasuries to the report coming so soon after a large rally on Jefferson and Harker supporting skipping a June hike.

Full summary:

• Prices rose moderately over the reporting period, though the rate of increase slowed in many Districts.
• Contacts in most Districts expected a similar pace of price increases in the coming months.
• Consumer prices continued to move up due to solid demand and rising costs, though several Districts noted greater price sensitivity by consumers than in the prior report.
• Overall, nonlabor input costs rose, but many contacts said cost pressures had eased and noted price declines for some inputs, such as shipping and certain raw materials.
• Home prices and rents rose slightly on balance in most Districts, after little growth in the prior period.