The conflict in the Middle East is the principal source of inflationary pressures in the United States, largely through its impact on energy-related costs, the U.S. Federal Reserve said in its latest Beige Book released on Wednesday.
The beige book showed that economic activity increased at a slight to moderate pace for ten of the twelve Federal Reserve Districts, while one district reported a slight decline and one reported no change.
Consumer spending remained mixed across districts and increasingly bifurcated across income groups amid persistent affordability pressures, according to the beige book.
Higher-income households proved resilient and relatively insensitive to price increases, while middle- and low-income households exhibited growing financial strain, it said.
The report showed that prices rose at a moderate to strong pace overall, with most districts reporting elevated inflation relative to the prior reporting period, and the districts attributed the inflationary pressures primarily to energy-related costs linked to the conflict in the Middle East, with spillovers extending into shipping, packaging, groceries, and fertilizer.
Meanwhile, non-labor input costs continued to outpace selling price increases, fueling broader concerns about margin compression, according to the the report.
In terms of employment, the beige book reported that most districts described a low-hire, low-fire environment.
The Beige Book, officially known as the Summary of Commentary on Current Economic Conditions by the Federal Reserve District, is a survey on economic conditions based on information collected from its 12 regional reserve banks. It is published eight times per year.
Latest Fed Beige Book shows evidence of rising inflation pressure, widening consumption gap in US
Russian President Vladimir Putin said on Thursday Russia is fully prepared and willing to negotiate with Ukraine at a U.S. military facility in Anchorage, Alaska, while his Ukrainian counterpart Volodymyr Zelensky proposed a face-to-face meeting.
At a meeting with heads of major international news agencies attending the 29th St. Petersburg International Economic Forum, Putin said Russia remains prepared to pursue a negotiated settlement based on a framework discussed with U.S. President Donald Trump during a meeting in Anchorage in August 2025.
He said Russia is ready to accept the compromises discussed at the meeting and expressed hope that the Ukrainian side would also agree to them.
Ukraine has previously rejected the Anchorage framework, as it calls for Ukraine to cede territory.
Meanwhile, Putin said Russian troops are advancing along the entire line of contact and have taken complete control of the Luhansk region, 85 percent of the Donetsk region and 80 percent of the Zaporizhzhia region.
Russia's Presidential Special Envoy Kirill Dmitriev said at the 29th St. Petersburg International Economic Forum on Thursday that despite efforts by forces seeking to prolong the war to disrupt talks between Russia and the U.S., bilateral engagement on Ukraine has made substantive progress.
Dmitriev dismissed reports that Russia-U.S. contacts have stalled, accusing other European nations of spreading disinformation to hinder the peace process.
Dmitriev also said that on Wednesday he had spoken by phone with U.S. President Donald Trump's special envoy Steve Witkoff and the president's son-in-law Jared Kushner and discussed bilateral economic cooperation.
He said the U.S. side had underscored the need to embrace peace rather than engage in constant provocations and confrontations.
The U.S. has been pushing for peace and Ukraine should join the process, Dmitriev noted, adding there were plans for further contacts with Witkoff and Kushner next week.
Later on Thursday, Ukrainian President Volodymyr Zelensky published an open letter to Putin, proposing to end the conflict through direct talks between the two leaders.
Relevant parties, including European countries and the U.S., should be part of the peace negotiations, the letter stated.
Ukraine is ready for a complete ceasefire during the talks and proposes an exchange of prisoners of war on the principle of "all for all," Zelensky also said in the letter.
Russia ready to talk with Ukraine at U.S. military base: Putin
Russia ready to talk with Ukraine at U.S. military base: Putin
