Fed: Beige book to be examined for evidence of strengthening – BMO CM

Michael Gregory, Deputy Chief Economist at BMO Capital Markets, suggest that June’s FOMC Minutes mentioned that “labor market conditions continued to strengthen in recent months” with references to the Beige Book at hand.

Key Quotes

“Although recent cooler inflation readings were deemed “idiosyncratic”, participants were probably also comforted by the fact that labour market conditions were strengthening alongside. As such, the upcoming Beige Book, covering the period from mid-May through the end of June, will be examined for evidence of this strengthening continuing, and in its wake, whether meaningful wage inflation is finally rearing its head. The Minutes also mentioned that “measures of labor compensation for the overall economy continued to rise only moderately despite strengthening labor market conditions.”