In the early hours of September 4, Beijing time, the Federal Reserve’s official website released the latest edition of the "Beige Book," which showed that prices have risen across all regions. Ten districts reported "moderate or slight" inflation, while the other two experienced "strong growth in input prices."

The "Beige Book" pointed out that feedback from various Federal Reserve districts indicated that consumer spending remained flat or declined, as wages for many households failed to keep up with rising prices.

According to the "Beige Book," almost all districts mentioned tariff-related price increases, with many regional contacts noting that the impact of tariffs on input prices was particularly significant. Business contacts in insurance, utilities, and technology-related industries reported higher prices.

The "Beige Book" released by the Federal Reserve aggregates the findings of 12 regional Federal Reserve banks on the economic conditions across the United States. This report serves as an important reference for the Federal Reserve’s monetary policy meetings. Federal Reserve officials will hold their next interest rate meeting from September 16 to 17.

According to statistics from the financial blog Zerohedge, mentions of inflation in this "Beige Book" reached a near four-year low. Meanwhile, mentions of "slowdown" decreased from a two-year high of 56 times in July to 34 times. This indicates that, based on feedback from Federal Reserve respondents, neither inflation nor an economic slowdown is currently a major risk factor of concern.

Regarding the labor market, the "Beige Book" showed that 11 districts described overall employment levels with almost no net change, while one district reported a slight decline. Half of the districts also reported a decrease in the number of immigrant workers, particularly in the construction industries of New York, Richmond, St. Louis, and San Francisco.

Additionally, according to the latest report released by the U.S. Bureau of Labor Statistics, U.S. JOLTS job openings in July fell to 7.181 million, the lowest level in 10 months. This suggests that against a backdrop of increasing policy uncertainty, U.S. businesses' demand for labor is gradually weakening.

As a result, market expectations for a Federal Reserve interest rate cut continue to rise. As of 06:30 Beijing time on September 4, according to CME's "FedWatch," the probability of the Federal Reserve keeping interest rates unchanged in September is 3.4%, while the probability of a 25-basis-point cut is 96.6%. The probability of the Federal Reserve keeping interest rates unchanged in October is 1.6%, with a cumulative probability of a 25-basis-point cut at 46.8% and a cumulative probability of a 50-basis-point cut at 51.6%.

Ellen Zentner, Chief Economic Strategist at Morgan Stanley Wealth Management, noted that the Federal Reserve has already opened the door to interest rate cuts, but the extent will depend on whether weakness in the labor market poses a greater risk than rising inflation. Market focus will continue to be on the job market.