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Economic Commentary

Economic Commentary – October 20, 2025

October 20, 2025 by Jeanette Garretty, Chief Economist

The release of the Federal Reserve’s Summary of Commentary on Current Economic Conditions —aka “The Beige Book”—received considerable attention last week. The Beige Book is always a useful document for economists and thought-leaders willing to go beyond the headlines and the mostly backward-looking economic statistics. Now, of course, the flow of backward-looking data from the Federal Government has slowed to a trickle, raising the importance of other, more colloquial sources of insight. The economic picture painted by the Beige Book is probably best described as one of uneasy stability: solid overall economic growth and employment, but falling consumer spending in a number of categories and rising prices. The Federal Reserve seems inclined to hope that a loosening of monetary policy through lower interest rates and other actions will ease the slowdown in consumer demand and sustain economic growth through a period of  “transitory” inflation. The question is one of relative impact, viewed through the lens of the US consumer; can lower mortgage rates and more attractive car financing adequately mitigate the higher cost of home building, home improvement, new cars, car parts/repairs and all other operating expenses due to tariffs?

Data to Watch

  1. US ExistingHome Sales for September, released Thursday, October 23
  2. US Consumer Price Index (CPI) for September, released Friday, October 24
  3. S&P Global Preliminary Purchasing Managers Index for October, released Friday, October 24

Suggested Reading

  1. The U.S. Is Tiptoeing Away From Many of Trump’s Signature Tariffs
  2. Trump’s Trade War With China Catches the World in Its Crossfire
  3. China’s economy grows 4.8% in third quarter as expected, but investment sees ‘rare and alarming’ drop
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