Beige Book data shows Fed about to enter bond market in a big way
The Beige Book summary of economic activity adds to evidence that the Fed will invest heavily in the bond market after its November meeting. Image: Boston Public Library/Flickr

The Beige Book, published by the Federal Reserve eight times a year, is a summary of economic conditions across the country. Beige Book data is gathered by each Federal Reserve bank in its respective district. The Beige Book released Thursday had little positive to say, except that economic growth, although dismal, had stopped slowing down.

Beige Book feeds Fed speculation

The latest Beige Book precludes a much anticipated meeting of Fed governors on Nov. 2-3. Most analysts, economists and investors expect the Fed to unveil new and unconventional approaches to stimulate the economy. The Washington Post reports that such a stimulus is desperately needed, according to Beige Book data. The October Beige Book reports on a weak job market, minuscule economic growth and the threat of deflation — factors that justify pumping money into the economy with major bond purchases, something Fed governors have hinted at for months.

Beige Book bright spots

The Fed’s Beige Book tells a tired old story, but Gail Marks Jarvis at the Chicago Tribune reports on a few patches of blue in the dark overcast. She points out that last spring, the Beige Book reported on “widespread signs of deceleration” in the economy. At least the October Beige Book data shows modest improvement. Bright spots highlighted by Jarvis include a continued expansion of manufacturing, new factory orders for a lot of industries and a slight increase in consumer spending.

Beige Book and the bond market

Overall, the Fed’s Beige Book said seven of the Fed’s 12 regions showed moderate economic improvement. The rest are either inconclusive or downright moribund. ABC News reports that traders see the Beige Book as a sign the Fed will is about to dive into the bond market. In the last month traders have been buying bonds to get higher Treasury yields. They are betting that the Fed will start buying more Treasurys after its November meeting, which will force bond yields down. The Fed is betting that buying Treasurys will push long-term interest rates lower to stimulate spending and investment.

Sources

Washington Post

Chicago Tribune

ABC News

Post By bryanh (1,420 Posts)

Connect

Do you have a fantastic idea related to this article, but just don't have the money you need to start your own company or side-business? Get the loans you need from https://personalmoneynetwork.com to help get your new company underway, from the small loan professionals at PersonalMoneyNetwork.

PG&E to pay $70 million for pipeline tragedy

PG&E to pay $70 million for pipeline tragedy

Pacific Gas and Electric Co., a northern California utility, has agreed to pay $70 million to the California town of San Bruno for a pipeline explosion that killed eight people in 2010. Company says it’s remorseful The San Francisco-based power company’s president, Chris Johns, released a statement Monday, saying PG&E is sorry and eager to […]

Judge stabbed and deputy shot in Washington courthouse

Grays Harbor County Courthouse

Following a standoff in a Washington state county courtroom Friday, a man reportedly escaped after shooting a sheriff’s deputy in the shoulder and stabbing a judge in the neck. The man is still at large. Treachery among the tree farms The incident occurred Friday afternoon in the western Washington town of Montesano, which bills itself […]

Microraptor was one flashy little dinosaur

Microraptor fossil

A team of Chinese and American scientists have found that Microraptor, a small four winged dinosaur that went extinct about 130 million years ago, was likely black and almost certainly had glossy, iridescent feathers. Until now, the coloring of extinct creatures was a matter of pure speculation. That may no longer be the case. The […]

Autocorrected message leads to school lockdown

Homage to the Sun

Adjacent schools in Georgia were locked down for two hours Wednesday after a text message reportedly warned of a “gunman” on campus. Later, it was learned that the message was the result of a smartphone autocorrect function, attempting to “fix” the misspelled slang word “gunna.” A series of mixups A series of mixups led to […]