The Beige Book projections come amid rampant speculation about when the Fed will raise interest rates for the first time since June 29, 2006. The Fed's target funds rate has been near zero since Dec. 16, 2008, as the U.S. central bank sought to stem the panic emanating from the financial crisis.  Despite all the Fed-watching, the Beige Book report did little to rattle markets initially after release. Stocks continued to rally a day after a big selloff Tuesday, while most government bond yields were little changed on the day.  Read More Currency wars may put the Fed on hold  Wage growth, though, continues to stagnate, and third-quarter gross domestic product growth is tracking at just 1.3 percent, according to the Atlanta Fed's latest estimate. Inflation remains muted, even after nearly seven years of zero rates and $3.7 trillion of Fed liquidity through quantitative easing.  "Most of this economy is still suffering from a lack of income, a lack of saving and a fairly high level of debt, and all you are going to do is raise the interest rates on them and you are going to damage employment for the people who are at the lower levels." said Steve Ricchiuto, chief U.S. economist at Mizuho Securities.  Economists generally believe the Fed is going to hike a quarter point later this month, through traders disagree. Traders at the CME are assigning just a 27 percent chance of a September move, with December's likelihood at 60 percent.  "The Fed bases its decisions not only on where things are today, but where they may go," said Carl Tannenbaum, chief economist at Northern Trust. "We really don't have a handle on how all of this Asian mess is going to come back and affect U.S. GDP growth. Unfortunately, while the Beige Book was encouraging I thought, it predates a lot of the turmoil we've seen coming out of Asia."  Bond expert Bill Gross, who manages an unconstrained fund at Janus Capital, said earlier Thursday that the Fed likely will raise rates in September but then hold steady for a prolonged period of time.  In his monthly letter to investors, Gross said the Fed's " September meeting language must be so careful, that 'one and done' represents an increasing possibility—at least for the next six months. The Fed is beginning to recognize that 6 years of zero bound interest rates have negative influences on the real economy—it destroys historical business models essential to capitalism such as pension funds, insurance companies, and the willingness to save money itself."
Most of the country is experiencing solid growth, with only the energy sector providing a drag, the Federal Reserve reported Thursday.