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American economy activity has pulled back ‘sharply and abruptly’. Joseph Trevisani, an analyst at FXStreet, recaps the Beige Book assembled for the April 28-29 FOMC meeting by the Federal Reserve Bank of Boston.

Key quotes

“‘Economic activity contracted sharply and abruptly across all regions in the United States as a result of the COVID-19 pandemic,’ said the Beige Book. All districts reported highly uncertain outlooks among business contacts, with most expecting conditions to worsen in the next several months.”

“Employment declined in all Districts, steeply in many cases. Contacts in several Districts noted they were cutting employment via temporary layoffs and furloughs that they hoped to reverse once business activity resumes. The near-term outlook was for more job cuts in coming months.”

“There is an old saying on Wall Street, ‘Never buck the Fed’ meaning never go against Fed policy. Or to put it another way, if the central bank is making a surprise cut in rates, there is a very good reason.”