What is the Federal Reserve’s Beige Book and why it is so important

Here's everything you need to know about the Fed's Summary of Commentary on Current Economic Conditions and why it matters to investors

The “Summary of Commentary on Current Economic Conditions by Federal Reserve District,” more commonly known as the Beige Book, is a qualitative review of economic conditions in the United States that is published eight times a year by the Federal Reserve. Let’s see everything there is to know.

Beige Book Federal Reserve: what it is and why it matters

The Beige Book is drawn up based on information arriving from each Federal Reserve district. The name of the report takes its name from the beige color of the cover.

Each of the 12 regional banks conducts interviews with local corporate CEOs, economists, bankers in their region, market experts etc., contributing a dedicated chapter to the report, which itself includes several sections.

The Beige Book is published eight times a year, two weeks before each meeting of the Federal Open Market Committee (FOMC), the operational arm of the US Central Bank that sets monetary policy objectives and interest rates.

The Beige Book is considered one of the most valuable tools available to the committee for making decisions on the economy and has been accessible to the public since 1985, today it can be easily consulted through the Federal Reserve website.

What information does the Fed’s Beige Book contain?

The Fed’s Beige Book outlines the conditions of the country’s economy. Thus including such aspects as the pace of local business activity, as well as employment and hiring conditions for each of the districts, possible growth in labor costs, demand for services finance and home construction.

The information contained in the report is exclusively in conversational form, there are no numerical tables. Each report aims to highlight changes in the economic picture compared to those previously published and describes in detail the impact of economic factors such as commodity prices, inflation and exchange rates.

The report is a useful complement to other forms of regional economic data because it includes information collected across districts. The report’s analysis allows Fed members to understand how key sectors are performing in different regions of the United States and evaluate whether overall conditions justify changes in monetary policy.

The Beige Book is not the only information tool used by the US Central Bank. But it is the only one to be made publicly and fully available online.

There are two other reports that the Fed sends to the FOMC, which are the “Blue Book” and the “Green Book”, which represent private publications and cannot be consulted directly.

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