MNI BRIEF: Fed's Beige Book Says Inflation Pressures Persist

U.S. inflation remained widespread in the period to mid-February and sped up in a few districts, while economic activity was challenged by the omicron wave of Covid, the Fed's Beige Book report said.

"Many Districts reported that the surge in COVID-19 cases temporarily disrupted business activity as firms faced heightened absenteeism," the report published Wednesday said. "Prices charged to customers increased at a robust pace across the nation. A few Districts reported an acceleration in prices."

In addition, "firms reported an increased ability to pass on prices to consumers; in most cases, demand has remained strong despite price increases. Firms reported they expect additional price increases over the next several months as they continue to pass on input cost increases." Many Federal Reserve officials still view the U.S. inflation surge as temporary to a large extent and likely to ease in the second half of the year, despite having moved away from a controversial description of rising prices as “transitory,” MNI understands.