The Federal Reserve said U.S. economic growth prospects were weak and set to slump further over the next year, while price growth showed signs of decelerating.
"The outlook for future economic growth remained generally weak, with contacts noting expectations for further softening of demand over the next six to twelve months," the Fed said Wednesday in its Beige Book report, typically published two weeks before each meeting of the policy-setting Federal Open Market Committee.
Price levels "remained highly elevated," but nine districts reported some degree of moderation in their rate of increase, the report showed.
The Fed has been raising interest rates aggressively to try and cool demand to bring down inflation that has remained above 8% for five straight months. A separate release Friday showed U.S. hiring remains robust, and a report next week will detail inflation for the month of August.
Chair Jerome Powell has pledged to raise interest rates and keep them there "for some time" to curb price increases. In a highly anticipated speech at the central bank's annual Jackson Hole conference last month, he said the central bank's tight policy would likely bring "some pain" to households and businesses.
The Fed raised its target range for interest rates to 2.25% to 2.5% in July, including two back-to-back 75-basis-point increases at its last two meetings. Policy makers have signaled they will again increase the benchmark by a large amount at their September confab, though whether it'll be 50 or 75 basis points remains a coin toss in market pricing.
