Fed Beige Book Says US Economy, Prices Rose as Energy Inflation Spread

The Federal Reserve said the US economy continued to grow at a modest pace in recent weeks, while price pressures also increased. Markets are focused on whether higher energy prices tied to the Middle East conflict could help reignite inflation.

The Fed's Beige Book, released on June 3, said economic activity edged up in recent weeks, while employment was generally unchanged.

The report said there was little change in the growth outlook for the next six months. At the same time, greater uncertainty and signs of slower consumer spending were weighing on business and consumer sentiment.

The Fed identified higher energy prices linked to the Middle East conflict as a key source of inflation pressure.

Higher energy costs are spreading to transportation, packaging, groceries and fertilizer, according to the report. Several districts also reported increased cost burdens.

Markets have raised concerns that rising global oil prices and supply-chain pressures could complicate the US path toward price stability. That, in turn, could influence future interest-rate decisions by the Federal Open Market Committee.