Beige Book Escalates Inflation Warning: Sees Most Prices Rising "Moderately", Some "Notably" In January, The Fed's Beige Book reported that: Almost all Districts saw modest price increases since the last report, with growth in input prices continuing to outpace that of finished goods and services. A month later and, as milquetoast as the Beige Book always is, it would appear things have escalated: On balance, nonlabor input costs rose moderately over the reporting period, with steel and lumber prices increasing notably Specifically, The Fed noted that In many Districts, the rise in costs was widely attributed to supply chain disruptions and to strong overall demand. Transportation costs continued to increase, in part due to rising fuel costs and capacity constraints. Reports on pricing power were mixed, with some retailers and manufacturers affected by input cost increases reporting the ability to pass prices through, while many others were unable to raise prices. Several Districts reported anticipating modest price increases over the next several months. Altogether, there were 166 mentions of "prices" (up from 144 in January), which fits with the surge in ISM survey prices... Perhaps even more notably, there were 21 mentions of "disruptions" in February (compared to 9 in January) Despite challenges from supply chain disruptions, overall manufacturing activity for most Districts increased moderately from the previous report The February Beige Book had 101 mentions of the word "moderate" (slightly up from 99 in Jan) but "moderate" - which is an 'escalation' from "modest" - was used 73 times in Feb, considerably more than the 54 times in January. Full Beige Book below: Tyler Durden Wed, 03/03/2021 - 14:15