What is a Beige Book?
The Beige Book is the informal name for the Federal Open Market Committee's (FOMC) ongoing reports titled Summary of Commentary on Current Economic Decisions by Federal Reserve District.
How Does a Beige Book Work?
The purpose of the Beige Book is to provide information to FOMC members about the economic changes and conditions occurring in each of the 12 Federal Reserve districts. This information comes from Federal Reserve Bank directors, district branch directors, business partners, analysts, and economists. More specifically, the Beige Book reports conditions in the consumer spending, tourism and services, manufacturing, real estate and construction, agriculture, natural resources industries, labor markets, wages and prices, and banking and finance categories for each of the 12 districts.
The Federal Reserve publishes the Beige Book eight times per year. It is usually made public at 2:15 pm EST, two Wednesdays before the FOMC meeting. Each Federal Reserve bank takes a turn preparing the Beige Book.
Why Does a Beige Book Matter?
It is important to remember that the primary goal of FOMC meetings is to establish a target Federal Funds rate This target is set after the evaluation, discussion, and forecasting of foreign and domestic financial conditions.
Although the Beige Book is not the only economic report FOMC members receive before each meeting (they also receive economic forecasts (the Green Book) and an analysis of monetary policy alternatives (the Blue Book), it is the only one of the three that is available to the public. This is why publication of the eci is often eagerly awaited by investors and economists, as it has a significant impact on the actions the FOMC might take at its next meeting.