Beige Book is a very important book compiled for the Federal Reserve Board. The main aim of compiling this book is to create a summary of economic conditions present around the United States . The Federal Reserve Bank collects various kinds of anecdotal information related to present economic condition in its District by creating reports from Bank. It includes interviews from interviews, market experts, economists, and sources . The Beige Book effectively summarizes economic information according to sector and district. This report helps outsiders to get good understanding about the knowledge of the Fed governors as they are going to attend their upcoming FOMC meeting.
Importance:
Baige book is very important for federal reserve as it’s staff uses indicators given in this report to determine interest rate policy at FOMC meetings. The Beige Book has been declared as one of the most valuable tools for gauging the overall condition and strength of the economy. In addition, it can be used to make a power shift in the market reactions through suitable economic strategies. However, it should be kept in mind that economic analysis or facts provided in the report are not necessarily views of FOMC members. Actually, information given in the report provides series of economic facts related to various districts. The facts given in this report can be accurate as they are given in the form of descriptive information not in a break down form as an actual data . Beige Book provides good information about expected future monetary decisions of Federal Reserve. For instance : Fed is expected to raise interest rates if Baige book portrays inflationary pressure. Moreover, Fed is expected to decrease interest rates of raise interest rates Beige Book shows recessionary conditions. This also means that bearish trend is expected for dollar .
Background:
Baige book is presented two weeks before the FOMC meeting. Moreover, Baige book is provided to each FOMC member. It should be kept in mind that this book is not a collection of statistical data. Actually, it consists of anecdotal information collected from each of the 12 Federal Reserve Districts. Moreover, this information is collected through carrying out interviews of local academics and businesspeople who have been surveyed about the econcomic health in their respective region.
Source: Federal Reserve Board Availability: This report is released at its scheduled time of 2:00pm EST two Wednesdays before each FOMC meeting.
Frequency: 8 times every year.
Revisions: There is no revision of the Baige book
Additions:
The ‘Beige Book’ is the informal name offered to the report prepared by the Federal Reserve.
The full name for the Beige Book report is named as “Summary of Commentary on Current Economic Conditions by Federal Reserve District”. The Beige Book is issued 8 times within a year. It is released on a Wednesdays before every FOMC (Federal Open Market Committee) meeting and this is the most important tool for giving advise to members on changes that have been made within the economy since the last meeting. Actually, Beige Book is prepared by utilizing data collected from every District within the jurisdiction of Federal Reserve and it is a mixture of anecdotal evidence related to the current economic conditions inside the district collected by using reports from differenet bank directors. In addition, it is also prepared through carrying out interviews with market experts and economists . The Beige Book report also presents this kind of economic information in the form of summaries given by district and sector.
Links: Federal Reserve Board – Official
Website – http://www.federalreserve.gov Beige Book news release – http://www.federalreserve.gov/fbrindex.htm