Definition of 'Beige Book'
The Beige Book is a Fed report titled "Summary of Commentary on Current Economic Conditions by Federal Reserve District." It is used to inform members on changes in the economy since the last meeting. Each of the Federal Reserve Banks collects anecdotal information on the state of the economy in their districts and this information is then summarized by district and sector in the Beige Book.
The Beige Book is only a market mover if the findings are a big surprise from what analysts thought they would be. Most of the time the Beige Book does not move the market and is used to gauge the strength of the economy.
The benefits of the Beige Book are that it's up-to-date inasmuch as it is at the most, only a couple of weeks old and is also what the FOMC members read before interest rate meetings and is therefore a good "leading indicator" on where interest rates may be set. The Beige Book is descriptive and has no figure associated with it which means that it cannot be used in quantitative models to value the economy.
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