Beige Book information facilitates big Fed transfer to stock sector

Various economic conditions across the United States of America are detailed eight times a year by the Federal Reserve in the Beige Book. Economic information gathered by each Federal Reserve bank district are outlined within the Beige Book. There was not much to get excited about in the Beige Book that hit the streets Thursday, but at least the flagging economy seems to have leveled off.

Guesses about the Fed validated with Beige Book

Before the Fed governors meeting, the latest Beige Book came out. Nov 2-3 can be when this meeting happens. The economy will probably be reviewed along with approaches to help the economy in the Fed meeting. The Washington Post reports that such a stimulus is desperately needed, according to Beige Book information. The October Beige Book accounts on a weak job market, minuscule economic growth and the threat of deflation — factors that justify pumping cash to the economy with major bond purchases, something Fed governors have hinted at for months.

The good Beige Book news

The patch of blue within the terrible forecast is what Gail Marks Jarvis at the Chicago Tribune discusses instead of looking at the grim outlook from the Fed’s Beige Book. She points out that last spring, the Beige Book reported on “widespread signs of deceleration” in the economic climate. At least, the Oct Beige Book data shows modest improvement. Jarvis explains that some of the great news consists of new factory orders in many industries, a rise in consumer spending and manufacturing expanding.

The bond sector with the Beige Book

The Fed’s Beige Book showed the twelve Fed regions. It was shown that seven of these improved economically. 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 into the bond market based on the Beige Book, accounts ABC News. In the last month traders have been purchasing bonds to get higher Treasury yields. Bond yields will likely start to go down following the November meeting. This is since the Fed is expected to start getting Treasury’s. The Fed is betting that buying Treasury’s will push long-term rates of interest lower to stimulate spending and investment.

Articles cited

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