The U.S. economy is facing a tough road ahead, according to the details provided in the latest report from the Federal Reserve — and signals of a potential recovery in the housing market aren’t yet being seen, according to the report.

Prices are rising, consumer spending has petered itself out, and asset quality continues to deteriorate among key financial institutions, according to the Fed’s Beige Book. Housing in particular was singled out as “anemic” in the report, although the Fed did note that “there were few signs on any quickening in the pace of deterioration.” That last sentiment may allow Fed officials to focus greater attention on inflation when considering the next potential rate cut, sources suggested to Housing Wire on Wednesday. “Housing looks bad in all 12 regions, no question, but the message appears as if it might be that it no longer is spiraling out of control,” said one source, who asked not to be named. “Given that prices appear to be facing widespread increases across nearly every core category, I’d expect Bernanke and crew look to hammer away on that front.” The Beige Book is a collection of reports from the Fed’s 12 regional banks, used to ground monetary policy decisions by Ben Bernanke and other members of the Fed’s board. Expectations currently have pegged the Fed to cut its core interest rate by 25 basis points at its next meeting, on April 29 and 30. On real estate, the outlook was admittedly dim:

Ongoing weakness in housing markets, in general, was reported in almost all Districts. Sales activity was generally reported to be declining in the Boston, New York, Philadelphia, Atlanta, St. Louis, Minneapolis, Dallas and San Francisco Districts, while Kansas City and Chicago noted slack demand and excess inventories. On the other hand, the Cleveland District saw some pickup in activity, while Richmond and Atlanta reported some pockets of improvement; Boston, Atlanta, and Chicago cited some recent pickup in traffic or buyer inquiries. New residential construction was reported to have remained at depressed levels, and none of the Districts reported any pickup since the last report.

The Fed also reported that credit quality has continued to deteriorate. “Widespread tightening in credit standards was reported,” the report said, “especially on residential and commercial real estate loans.”