Beige Book economic data one more heads-up for bond traders

The Federal Reserve publishes the Beige Book eight times a year to offer an assessment of the state of the economy in different regions around the United States of America. Each Federal Reserve Bank district gathers economic info specific to its region. The surveys are published in the Beige Book. The Beige Book released Thursday had little optimistic to say, except that economic growth, although dismal, had stopped slowing down.

Beige Book can make Fed guesses more dominant

The latest Beige Book precludes a much envisioned 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. There needs to be a stimulus, Beige Book info exhibits. This is what the Washington Post reports. Fed governors are hinting at getting bonds while pumping more money to the economic climate while the October Beige book addresses the weak job sector, minuscule economic growth and threat of deflation.

The good Beige Book news

The Fed’s Beige Book tells a tired old story, however Gail Marks Jarvis at the Chicago Tribune accounts on a few patches of blue within the dark overcast. Last spring, the Beige Book had a different opinion. It talked about the “widespread signs of declaration” within the economy. There were improvements shown within the October Beige Book information. Also, Jarvis points out that the manufacturing is expanding. She also explains that an increase in consumer spending and more factory orders for most industries were shown in the report.

The bond market changing with the Beige Book

Overall, the Fed’s Beige Book said seven of the Fed’s 12 regions showed moderate economic improvement. The rest of the regions appear to be questioned. If they aren’t questioned, then likely they went down. The Fed is being expected to start to the bond market based on the Beige Book, accounts ABC News. A higher Treasury yield is what traders are trying to get by purchasing bonds due to this. After the Nov meeting, the Fed is expected to start buying more Treasury’s which would make bond yields go down a bit. Spending and investment can be stimulated if the long term rates of interest are pushed even lower which is the plan of the Fed.

Citations

Washington Post

washingtonpost.com/wp-dyn/content/article/2010/10/20/AR2010102005512.html?sub=AR

Chicago Tribune

newsblogs.chicagotribune.com/marksjarvis_on_money/2010/10/fed-reports-glimmers-of-sunshine-in-economy.html

ABC News

abcnews.go.com/Business/wireStory?id=11929195