Shift in Beige Book suggests slowdown

Back in September, six of the 12 Fed districts reported 'moderate' growth. Now that number is down to three.

If the Fed wasn't droning on about inflation and rate hikes, there would be no hawkish talk. There is nothing in the data that suggests an accelerating economy or inflation. Commodities remain in crash-mode with Brent just falling below $30 for the first time in almost 12 years.

What's increasingly clear is that the US is struggling to sustain +2% growth. Year after year the Fed has started out by forecasting 'this is the year' growth will accelerate to 3% and it has invariably fallen way short.

The goalposts have been moved to something like 2.2% to 2.5% but now even that looks optimistic. 'Moderate' growth is likely something below 2% and nothing about it screams 'four rate hikes this year'.