The Fed’s “beige book” of anecdotal U.S. economic information came out last week and guess what? It confirmed what we’ve been telling folks for many months.

The U.S. economy is entering 2020 on solid footing with continued modest expansion in the final six weeks of 2019, the Federal Reserve said Wednesday. Tighter labor markets—we stand at 50-year lows in unemployment—slow price rises and a robust holiday season, especially online, offset weakness in manufacturing, the Fed said.

It went on to say that trade uncertainty and tariffs continued to weigh on some businesses. “Expectations in the near-term outlook remained modestly favorable across the nation,” the Fed said. While it’s an important confirmation that the Fed said this, regular readers know we’ve been saying this. And if you want more on what this means, see my colleague Tom Lee’s piece, beginning page 3.

And with inflation muted, it means that a Fed change in interest rates in 2020 seems unlikely, at this point. How muted, you might ask. The consumer-price index increased 2.3% in December from a year earlier, up from the 2018 increase of 1.9%. Prices excluding food and energy also increased 2.3% in December from a year earlier, higher than in 2018 but down from 2.4% in September.


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