Fed: The Economy Is Slowing As ‘Companies Can’t Figure Out the Rules of This Tariff Game’

Around the country, business and community leaders are still holding their breath, waiting for another tariff-related shoe to drop.

At least that’s the case according to the Beige Book, the Federal Reserve’s report on the economy released Wednesday. The report gathers interviews, anecdotes, and observations from businesses and other leaders from around the country. In May, it revealed that decision-makers were still paralyzed about spending and expansion plans while they wait to see what will happen next in President Donald Trump’s unpredictable tariff campaign.

“On balance, the outlook remains slightly pessimistic and uncertain, unchanged relative to the previous report,” the latest Beige Book said.

Much like April’s Beige Book, the report was shot through with mentions of “uncertainty” and related terms, especially about trade policy. In South Carolina, a commercial real estate agent said deals for industrial facilities have been falling through.

“Companies freeze because they can’t figure out the rules of this tariff game,” the agent told the Fed.

The same uncertainty was reported in many regions and industries.

“No one wants to spend money when the future is so uncertain,” one Minnesota firm told the Fed, adding that price uncertainty was “pushing projects out of budget” and complicating bidding.

In Kansas City, Missouri, a manufacturing executive used a medical metaphor to describe the difficulty of making investment decisions in the coming years.

“Right now, we are working on triage; we’ll worry about diet and exercise later,” they said.

The report echoed concerns of Fed officials and economists who have said uncertainty about the future of tariffs has taken a toll on the economy, as businesses delay making investments and hiring. Forecasters expect GDP growth to slow and unemployment to rise as tariffs and the uncertainty surrounding them start to bite.