The Beige Book Report is a leading indicator of the economy. It is a report issued by Federal Reserve Board. It is also called as “the Summary of Commentary on Current Economic Conditions by Federal Reserve District”. It is released two Wednesdays prior to each meeting of the Federal Open Market Committee (FOMC) Meeting which is held eight times in one year. It means that this report is published eight times in a year.
The Beige Report is unlike other economic indicators in a way that its style of writing is a bit different. Instead of being filled with a lot of raw data, it is written in a more relaxed and conversational fashion. This book consists of 13 different sections. The first section provides the national summary which is drawn from the twelve regional reports. The remaining twelve sections contain the regional reports from each of the member Fed district banks.
The Beige Book presents an original viewpoint of economic activity. There is a marked difference between this report and the other indicators containing enormous amount of dry data. It is used by the members participating in the FOMC meeting.
This book mainly comprises of the forward looking comments and thus helps the investors and traders to decide about their future investments. It gives a clear and concise picture of the health of economy and endeavors to join the data from different reports to give qualitative measures rather than mere figures.
Beige report is the only economic indicator which gives the detailed account of economical data on geographical basis instead of compiling the figures on the basis of industrial group or economic sector.
One major short fall of Beige Report is that each Fed district includes the data in this report at its own discretion. The report may contain the details on an industry from one district while the other districts do not report on it. Thus the data may have ambiguities.
This book provides an insight to the investors about the way the federation approaches its financial policy judgments and responsibilities.
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