Fed's Beige Book Shows Growth in Economic Activity Despite Middle East Tensions

04:36 PM EDT, 04/15/2026 (MT Newswires) -- Most Federal Reserve districts saw growth in economic activity since early March despite hostilities in the Middle East, the US central bank said in its latest Beige Book released Wednesday.

Eight districts reported a slight to moderate rise in economic activity, while the remaining four saw little change or declining activity, according to the latest document, prepared by the New York Fed based on data collected by April 6.

The previous Beige Book, which was released March 4, showed that most Fed districts reported economic growth since mid-January, while the overall outlook was "optimistic." Information for that report was collected before the US-Israel war with Iran broke out at the end of February.

"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," according to the latest report Wednesday.

Reports suggest Washington and Tehran could return to Pakistan for a second round of talks ahead of the deadline for a two-week ceasefire between the US and Iran. The first round of peace talks in Islamabad ended without a breakthrough.

Consumer spending edged higher despite a harsh winter weather in some areas and higher fuel prices, the Fed said.

"Many districts continued to report signs of consumer financial strain, increased price sensitivity, and rising demand at food banks and other social service organizations, while spending among higher-income consumers was resilient," the Beige Book showed.

Activity was described as mixed in the agriculture sector, with rising crop prices offsetting the surge in fertilizer and fuel costs.

US farmers are facing fertilizer affordability constraints as supply disruptions caused by the effective closure of the Strait of Hormuz have pushed prices higher, according to the American Farm Bureau Federation.

A vast majority of districts saw moderate price increases overall, although all reported sharp gains in energy and fuel costs due to the Middle East conflict, according to the Beige Book. US consumer inflation accelerated to its highest monthly reading in nearly four years in March, the Bureau of Labor Statistics reported Friday.

Employment was steady to up slightly, with one district reporting a slight decline, the Fed document showed. On the labor front, demand was seen stable in most districts amid low turnover and minimal layoffs, the Fed document showed.

"Business outlooks varied amid widespread uncertainty about future conditions," the Beige Book said.

The Fed should be "nimble" in adjusting monetary policy in light of heightened risks to inflation and employment driven by the Iran war, minutes from the central bank's March 17-18 policy meeting showed last week.

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