The Federal Reserve noted in its latest Beige Book economic report that employment levels across the United States were broadly unchanged, while signs of divergence in inflationary pressures emerged. The report showed that three Federal Reserve districts reported strong price increases, eight saw modest increases, and three explicitly warned that pressure from import prices was rising sharply.

The data paint a worrying macroeconomic picture: as momentum in the labor market slows, imported inflationary pressures are quietly building. This directly undermines market optimism that the economy can achieve a smooth soft landing, suggesting that the risk of stagflation is growing.

Given this complex situation, the Fed is unlikely to have much room to ease monetary policy further in the near term, and high interest rates may persist for longer. Treasury yields and the U.S. dollar index may find temporary support, continuing to weigh on valuations of traditional risk assets.

For crypto markets, mounting pressure on expectations for macro liquidity means incoming funds are likely to be more cautious. Until there is a clear improvement in fundamentals, core assets such as $BTC may continue to face the test of forming a volatile bottom and deleveraging.📉

#Fed #Inflation #BeigeBook