According to analysts at Nomura, the Beige Book prepared for the 20-21 March FOMC meeting will likely reflect solid improvement in the labor market since the previous meeting and continued momentum in the economy.

Key Quotes

“Reflecting positive data, the Beige Book will likely maintain that economic growth continued at a “modest to moderate” pace. Moreover, we expect the Beige Book to indicate healthy labor market conditions in most districts, which would be consistent with incoming labor market indicators. In addition, January core CPI rose by 0.3% m-o-m with broad-based strength, which increases the likelihood of a pickup in the underlying inflation trend. Against this backdrop, changes in language on regional inflation trends, if any, would be telling. Further, we believe any further color on the impact of the tax bill would be telling. In the previous issue of the Beige Book, many business contacts expressed confidence that the tax bill would provide a boost to growth in 2018, but few reported that the bill would encourage investment on their part.”