Beige Book info displays Fed about to enter stock market in a large way

The Beige Book, published by the Federal Reserve eight times a year, is a summary of economic conditions across the country. Info on economic conditions within each Federal Reserve bank’s district is detailed within the Beige Book. There wasn’t much to get anxious about within the Beige Book that hit the streets Thurs, however at least the flagging economic climate seems to have leveled off.

Guesses concerning the Fed verified with Beige Book

The latest Beige Book precludes a much predicted meeting of Fed governors on Nov. 2-3. The economy will probably be reviewed along with approaches to help the economy within the Fed meeting. There needs to be a stimulus, Beige Book data exhibits. This is what the Washington Post reports. The October Beige Book accounts on a weak job market, minuscule economic growth and the threat of deflation — factors that justify pumping money to the economy with major stock purchases, something Fed governors have hinted at for months.

The good Beige Book news

The Beige Book from the Fed’s exhibits all the bad things going on. Gail Marks Jarvis at the Chicago Tribune accounts on the great parts of the report. The Beige Book talked about “widespread signs of declaration” in the economic climate just last spring. The Oct Beige Book data was not all bad. Some improvements were shown too. Bright spots highlighted by Jarvis consist of a continued expansion of manufacturing, new factory orders for a lot of industries and a slight boost in consumer spending.

How the Beige Book affects the stock sector

The Fed’s Beige Book showed the twelve Fed regions. It had been shown that seven of these improved economically. The rest of them either went down a ton or just being questioned. The Fed is being expected to start into the bond sector based on the Beige Book, reports ABC News. This has brought on more traders to purchase bonds. They want higher treasury yield out of it. Following the Nov meeting, the Fed is expected to start purchasing more Treasury’s which would make bond yields go down a bit. The Fed is betting that purchasing Treasury’s will push long-term rates of interest lower to stimulate spending and investment.

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