That US Federal Reserve stated in his beige book that it expects inflation in general to moderate just two weeks before the central bank holds its monetary policy meeting and is likely to hike interest rates by 75 basis points.

The Federal Reserve indicated that price growth remained strong despite some easing in several districts.

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“Substantial increases in input prices have been reported across a variety of industries, although some declines in raw material, fuel and freight costs have been noted. Selling price growth was mixed, with larger increases reported by some districts and moderation observed in others. Some contacts noted solid pricing power over the past six weeks, while others said pass-through is becoming more difficult as customers push back,” it said.

Why it matters: The Beige Book is a publication of the Federal Reserve System on current economic conditions in the 12 Federal Reserve Districts. Stocks and bonds alike have been hit by the Fed’s rate hikes and policy path forecasts. That SPDR S&P 500 ETF Trust SPY has lost over 22% so far this year while the vanguard Total Bond Market Index Fund ETF BND has lost over 17%.

Labour market: Several districts reported slowing labor demand, with some noting that companies were reluctant to increase payrolls amid mounting concerns of an economic slowdown, the central bank said. Overall labor market conditions remained tight, although half of the counties saw some easing of hiring and/or retention difficulties, she added.

“Retail spending was relatively flat, reflecting lower discretionary spending, and auto dealers noted continued sluggishness in sales attributed to limited inventories, high vehicle prices and rising interest rates,” it said.

The Fed also said the outlook turned more pessimistic amid rising demand concerns. “Bankers in most reporting districts reported a decline in lending, in part due to shrinking…