Banks, real estate lenders, seeing ‘mixed’ economic conditions, Fed reports

“Mixed” economic conditions in the financial services sector were reported Wednesday by the Federal Reserve, with some of the agency’s district reporting improved business lending – but others continued to “highlight muted activity.”

The agency said the mixed results also included residential and commercial real estate lending.

In the October issue of its Beige Book, the Fed said that economic activity at large was little changed on balance since its previous report. The agency said three of the Federal Reserve District Banks reported slight to modest growth in activity, five reported no change, and four noted “a slight softening.”

“Overall consumer spending, particularly on retail goods, inched down in recent weeks, although auto sales were boosted in some Districts by strong demand for electric vehicles ahead of the expiration of a federal tax credit at the end of September,” the Fed said.

According to the report, spending by higher-income individuals on luxury travel and accommodation was “strong.” It added that several district reports highlighted that lower- and middle-income households continued to seek discounts and promotions in the face of rising prices and elevated economic uncertainty.

On prices, the Beige Book noted that prices rose further during the reporting period. “Several District reports indicated that input costs increased at a faster pace due to higher import costs and the higher cost of services such as insurance, health care, and technology solutions,” the report stated. “Tariff-induced input cost increases were reported across many Districts, but the extent of those higher costs passing through to final prices varied.”

Beige Book – October 2025

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