The Federal Reserve’s (Fed) March 2026 Beige Book, based on data collected through February 23, showed mixed economic conditions. Seven of the twelve districts experienced slight or moderate growth, but the number of flat or sinking districts increased from four to five. Still, most districts maintained bullish expectations of slight to moderate growth in the future.
On the cost side, prices increased moderately in most districts, with eight districts seeing moderate increases and four seeing slight or moderate increases. In most districts, wages rose at a modest or modest pace due to continued competition for workers.
The most essential information in a beige book
- In most districts, wages rose at a modest or modest pace as companies competed for workers.
- Overall economic activity grew at a tiny or moderate pace in seven of the twelve Federal Reserve districts, while the number of districts reporting stable or sinking levels of economic activity increased from four in the previous period to five in the current period.
- Overall, economic expectations were bullish, with most districts expecting slight to moderate growth in the coming months.
- Prices have increased moderately in recent weeks, with eight neighborhoods seeing moderate price increases and four seeing slight or moderate price increases.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two missions: achieving price stability and promoting full employment. The basic tool for achieving these goals is adjusting interest rates. When prices rise too quick and inflation exceeds the Fed’s 2% target, the Fed raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US dollar (USD) because it makes the United States a more attractive place for international investors to park their money. When inflation falls below 2% or the unemployment rate becomes too high, the Fed may lower interest rates to encourage borrowing, which will negatively impact the dollar.
The Federal Reserve (Fed) holds eight policy meetings a year, during which the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. Twelve Fed officials attend the FOMC meeting – seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional reserve bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may employ a policy called quantitative easing (QE). QE is the process by which the Fed significantly increases the flow of credit in a gridlocked financial system. This is an unusual policy measure used during crises or when inflation is extremely low. This was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more dollars and using them to buy high-quality bonds from financial institutions. QE tends to weaken the US dollar.
Quantitative Tightening (QT) is the reverse process of QE, in which the Federal Reserve stops purchasing bonds from financial institutions and does not reinvest capital from the bonds it holds at maturity to purchase up-to-date bonds. This is usually positive for the value of the US dollar.
