The U.S. Federal Reserve warned in its latest Beige Book that heightened economic uncertainty is significantly eroding consumer confidence. Although overall consumer spending continues to show modest growth, multiple Federal Reserve districts reported that households—particularly low-income groups—are becoming increasingly price-sensitive and cutting back on expenditures, thereby weighing on retail sales.

Released on March 4, the Beige Book compiles findings from surveys conducted by the Fed’s 12 regional Reserve Banks and serves as a key input for upcoming monetary policy decisions. The report specifically highlighted that former President Donald Trump’s ongoing tariff policies have become a major driver of rising business costs. While some companies had previously absorbed these costs, many are now passing them on to consumers through higher prices as import expenses continue to climb.

Since returning to the White House last year, Trump has imposed multiple rounds of additional tariffs on numerous countries, including traditional allies, triggering global trade disruptions and amplifying financial market volatility. Although the U.S. Supreme Court ruled last month that certain tariff actions exceeded the president’s statutory authority—prompting the rollback of specific levies—the administration swiftly pivoted to other legal justifications, announcing a broad-based 10% tariff on nearly all imported goods. Adding to market unease, Treasury Secretary Scott Bessent indicated earlier this week that a new, even steeper 15% global tariff could be implemented as early as this week, further fueling concerns about inflation and the economic outlook.