Troubling Views in Beige Book

Residential real estate markets softened further, and most Fed districts reported additional declines in home sales, prices and construction. Financial institutions reported an increase in delinquencies and a slight deterioration in credit quality.

Most regions saw more business lending, but a decline or slower growth in consumer lending. Additionally, contacts in several industries indicated a "higher-than-usual degree of uncertainty about the outlook for economic activity," the beige book said.

"Many real estate contacts expect housing markets to remain subdued for several months," it continued. "At firms without direct ties to real estate and construction, contacts are still wary that credit tightening and slowing construction might slow activity in their industry, but there is cautious optimism because few see much evidence of such spillovers at this time."

Fed policymakers will next meet to discuss rates at a two-day gathering set for Oct. 30-31, and the beige book could heighten the chance of another reduction. At the last meeting in September, the bankers cut their target fed funds rate by 50 basis points to 4.75% in an effort to keep business activity healthy and the economy heading upward.

The entire beige book can be found by clicking here.