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Feds Beige Book

Published 07/22/2008, 08:00 PM

Definition
It’s a known survey on Current Economic Conditions; it's published 8 times per year two Wednesdays ahead of every FOMC by the Federal Reserve. It does not contain the traditional method on indices reflecting raw data, yet it's constructed of 13 sections in total, 12 regional reports from each of the Fed member banks and interviews economists, with key business contacts, market experts, and other sources.

The Beige Book is designed to aid the FOMC in their decision making process and assessing economic conditions. It does not by that overweigh other indicators as much as they all work in coherence in the decision making. Other books are prepared for the FOMC meeting and are not publicly available which are the Green and Blue Books and they account more important than the Beige Book. To market participants they account the Beige Book as rather a lagging indicator as it is released much later than other vital economic indicators which help clarify ongoing economic condition more comprehensibly.
 
General Effect
The Beige Book is not considered one of the key market movers, as it is a lagging indicator, and basically it does not present new data series as other indicators rather than work as a collective perspective.

Sometimes the survey contradicts with the data released and for that it is not that important to market. Businesses meanwhile may look upon districts performance in the report if their business is within the region and that is more a confined effect on businesses and might affect equities rather than the foreign exchange.

The things used to derive from the survey is mainly the rhetoric used as an indicative measure to what the Fed's move might be in the upcoming FOMC meeting, whether the language was dovish or probably more hawkish. Again not much considered of an effect on currencies and does not acquire much market consideration and reaction.

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