The Federal Reserve highlighted rising concerns about a potential US recession in a report, according to its Beige Book that was released Wednesday.
'Economic activity increased slightly overall in late May and June, and contacts expected growth to remain slow in the coming months, with many expressing concerns about the potential for a recession,' according to the report. 'Scattered reports of layoffs, attrition, or hiring freezes have appeared as chatter about a future recession has increased.'
The report comes after US annual consumer inflation rose 9.1% in June, the largest 12-month increase since November 1981, according to the Labor Department.
That forces the Fed to increase interest rates higher and stronger as the central bank is now anticipated on July 27 to make a rate hike of 100 basis points, instead of 75 points.
'Interest rate hikes have not seemed to dampen anyone’s urge to build yet' in residential construction, the Beige Book noted.
But the Fed's aggressive monetary policy also elevates recession fears in the world's biggest economy.
'Rising interest rates and expectations of a slowdown have virtually eliminated growth in commercial real estate loans and home equity lines, while auto lending and other consumer loans grew slightly,' said the report.
By Ovunc Kutlu
Anadolu Agency
energy@aa.com.tr