INSTANT VIEW: Fed data shows price pressures elevated or rising

NEW YORK (Reuters) - The pace of economic activity slowed somewhat through mid-July and price pressures were elevated or increasing across the country, the Federal Reserve said on Wednesday in a report showing evidence of inflation warning signs across the country.

KEY POINTS: * "All reporting districts characterized overall price pressures as elevated or increasing," the Fed said in its Beige Book report on the state of the economy through July 14. * Input prices rose, particularly for fuel, petroleum-based materials, metals, food and chemicals, the U.S. central bank said.

COMMENTS:

NARIMAN BEHRAVESH, CHIEF ECONOMIST, GLOBAL INSIGHT, LEXINGTON, MASSACHUSETTS:

"Today's report is consistent with every other piece of data that we have. Clearly the economy is in a what may be called a near recessionary state. And inflationary pressures are picking up but it is mostly headline inflation so far.

"We see -- and the report here is consistent -- announced price increases. But the data suggests that a lot of those companies which announced price increases have a very hard time making them stick.

"From the Fed's perspective, the high oil and fuel and food prices haven't yet spread to the rest of the economy, which is very critical to what the Fed does next. As long as there is not this sort of spillover, then I think the Fed can at least for the moment stay on hold."

SUBODH KUMAR, CHIEF INVESTMENT STRATEGIST, SUBODH KUMAR & ASSOCIATES, TORONTO:

"I think that basically, the Fed is going to be waiting on any interest rate increase. There are no particular signs of strength, and when one look at the whole picture, it seems the Fed will not be raising rates soon. One of the Beige Book surprises for me, though, was the Fed's mentioning that the health care and information technology industries look to be in relatively good shape. Those have been among the weaker sectors in the S&P, so I think those are still areas of opportunity."

STEVE GOLDMAN, MARKET STRATEGIST, WEEDEN & CO, GREENWICH, CONNECTICUT:

"This is the kind of news you'd expect. It doesn't seem to be anything surprising. There are still price pressures out there due to higher fuel costs and companies are having a tough time passing those through."

KIM RUPERT, MANAGING DIRECTOR OF GLOBAL FIXED INCOME ANALYSIS, ACTION ECONOMICS LLC, SAN FRANCISCO:

"There's not a whole lot that's new here. As expected it said the economy had slowed somewhat and we also saw signs of rising price pressures, although not in wages. It definitely suggests the Fed is on hold."

DAVID WATT, SENIOR CURRENCY STRATEGIST, RBC CAPITAL MARKETS, TORONTO:

"It came out a little early, but no surprises in the headlines that are coming out."

MARKET REACTION: STOCKS: Dow turns lower; S&P, Nasdaq flat CURRENCIES: U.S. dollar pares gains against euro, yen BONDS: U.S. Treasuries pare losses