Potential higher tariffs stoke worries on economy, higher inflation: Biege Book

Investing.com -- The potential for higher tariffs from the incoming Donald Trump administration has stoked concerns about economy and inflation at time when price pressures are expected to persists this year, according to the Federal Reserve's Biege Book released Wednesday.

"Contacts expected prices to continue to rise in 2025, with some noting the potential for higher tariffs to contribute to price increases," according to anecdotal information collected by the Fed's 12 reserve banks through Jan. 6.

Contacts in several Districts, meanwhile, expressed concerns that changes "in immigration and tariff policy could negatively affect the economy.," the report showed.

The report comes just days ahead of President-elect Donald Trump's inauguration on Jan. 20, with many expecting Trump to imposed tariffs sooner rather later.

The outlook on the economy, however, remains more optimistic than pessimistic, despite growing signs of uncertainty on labor demand.  "Contacts in some Districts expressed greater uncertainty about their future staffing needs," it added.