-- The Federal Reserve's Beige Book said on Wednesday that the Middle East conflict is driving uncertainty and pushing energy costs higher across US economic districts.
The Beige Book said, "the conflict in the Middle East was cited as a major source of uncertainty that complicated decision-making around hiring, pricing, and capital investment, with many firms adopting a wait-and-see posture."
The book added that energy costs surged across regions, driving broader price pressures and raising costs across supply chains.
"Energy and fuel costs rose sharply in all Districts, attributed to the Middle East conflict, leading to higher freight and shipping costs and higher prices for plastics, fertilizers, and other petroleum-based products. Input cost pressures beyond energy-related increases were also widespread."
Energy activity saw only modest gains despite rising oil prices, the Beige Book said, as producers remained cautious about expanding drilling.
"Energy activity was up slightly as oil prices rose, though many producers remained cautious about increasing drilling due to uncertainty about the persistence of higher prices."