Introduction<br /><ul><li> Report on current economic conditions in each of the 12 Federal Reserve districts covering the ...
 Regional Banks in the Federal Reserve System gather anecdotal information
 The Beige Book summarizes this data into a relatively short document, giving a picture of economic trends and challenges ...
 Set the monetary stance by fixing the overnight borrowing rate (Short Term lending rates)
 The FOMC attempts to affect price levels in order to keep inflation within the target range</li></li></ul><li>Structure o...
 New York
 Philadelphia
 Cleveland
 Richmond
 Atlanta
 Chicago
 St. Louis
 Minneapolis
 Kansas City
 Dallas
 San Francisco</li></ul>Sector representation<br /><ul><li> Retail
 Tourism
 Non Financial Services
 Manufacturing
 Real Estate and Construction
 Banking
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The Beige Book

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Transcript of "The Beige Book"

  1. 1.
  2. 2. Introduction<br /><ul><li> Report on current economic conditions in each of the 12 Federal Reserve districts covering the entire U.S.
  3. 3. Regional Banks in the Federal Reserve System gather anecdotal information
  4. 4. The Beige Book summarizes this data into a relatively short document, giving a picture of economic trends and challenges faced by different parts of the nation</li></li></ul><li>Federal Open Market Committee<br /><ul><li> The FOMC meets eight times per year to decide on monetary policy
  5. 5. Set the monetary stance by fixing the overnight borrowing rate (Short Term lending rates)
  6. 6. The FOMC attempts to affect price levels in order to keep inflation within the target range</li></li></ul><li>Structure of the Beige Book <br />Regional representation<br />National (Summary)<br />12 Districts:<br /><ul><li> Boston
  7. 7. New York
  8. 8. Philadelphia
  9. 9. Cleveland
  10. 10. Richmond
  11. 11. Atlanta
  12. 12. Chicago
  13. 13. St. Louis
  14. 14. Minneapolis
  15. 15. Kansas City
  16. 16. Dallas
  17. 17. San Francisco</li></ul>Sector representation<br /><ul><li> Retail
  18. 18. Tourism
  19. 19. Non Financial Services
  20. 20. Manufacturing
  21. 21. Real Estate and Construction
  22. 22. Banking
  23. 23. Financial Services
  24. 24. Agriculture
  25. 25. Natural Resources</li></li></ul><li>Compiling the Beige Book <br />
  26. 26. Interpretation<br />
  27. 27. Interpreting the Beige Book…<br />Consumer spending and Tourism<br />• Consumer spending is the largest part of aggregate demand or effective demand at the macroeconomic level<br />• Durable: Auto sales; Non durable goods: Retail sales<br />• Tourism activity: business and leisure<br />• Reasons for the change in consumer spending<br />Nonfinancial Services<br />• Port activity<br />• Health care services<br />• Transportation services: rail road shipments (industrial activity) <br />• Domestic volumes of freight and parcels<br />
  28. 28. Interpreting the Beige Book…<br />Manufacturing<br />• Manufacturing activity<br /><ul><li>Auto production
  29. 29. Consumer goods
  30. 30. Steel production
  31. 31. Textiles</li></ul>• Reasons for the change in manufacturing activity<br />Real Estate and Construction<br />• Residential real estate • Non residential real estate<br /><ul><li> Home construction - Demand for office space
  32. 32. Home prices - Commercial rental prices
  33. 33. Home re-modelling activity - Industrial construction
  34. 34. Rental prices</li></li></ul><li>Interpreting the Beige Book…<br />Banking and Financial Services <br />• Loan demand<br />• Commercial and industrial loans<br />• Delinquencies rates: unable to pay loans<br />• Credit worthiness <br />Agriculture and Natural Resources<br />• Crop and livestock: production sales and prices<br />• Draught conditions<br />• Energy sector<br />• Production of oil, natural gas, coal etc: oil drilling activity, natural gas exploration, coal production <br />
  35. 35. Interpreting the Beige Book…<br />Employment, Wages and Prices<br />• Labour market conditions<br />• Wage rates<br />• Unemployment figures<br />• Input prices pressures<br /> - Ability to pass on the price rise<br />
  36. 36. Interpreting the Beige Book<br />
  37. 37. District Analysis<br />Consumer Spending and Tourism:<br /><ul><li> Auto sales
  38. 38. Consumer confidence
  39. 39. Tourism Activity</li></ul>Other Business Activity<br /><ul><li> Labor Market
  40. 40. Hiring
  41. 41. Input costs
  42. 42. Manufacturing activity</li></ul>Financial Developments<br /><ul><li> Demand in consumer, commercial and industrial loans
  43. 43. Residential mortgages</li></ul>Construction and Real Estate <br /><ul><li> Residential rates
  44. 44. Commercial RE
  45. 45. Industrial vacancy rates</li></li></ul><li>Quantifying the Beige Book<br />• Beige Book provides anecdotal information<br />• Balke and Petersen (2002) – Beige Book Index (Quantitative )<br />• Converted the description of economic growth on a scale from-2 to 2<br />• Beige Book Index: compilation of the scores<br /><ul><li> Easier to comprehend
  46. 46. Facilitates comparative analysis</li></li></ul><li>….Beige Book Index<br />Source: Federal Reserve Bank of Atlanta – Economic review<br />
  47. 47. Beige Book Index: 2006 v/s 2008 (recession)<br />Consumer Spending and Tourism<br />Real Estate and Construction <br />Manufacturing<br />
  48. 48. Significance<br />
  49. 49. Significance of the Beige Book…<br />
  50. 50. Impact of the Beige Book..<br />
  51. 51. Shortcomings of the Beige Book..<br /><ul><li> Difficult to identify and quantify
  52. 52. Rarely is any new statistical data presented, only anecdotal reports
  53. 53. Filled with measured "Fed-speak“
  54. 54. Specific industry conclusions are hard to draw from the report
  55. 55. Each Fed district can use its discretion on what to include in its report
  56. 56. Expectations about such reports are difficult to ascertain</li></li></ul><li>Beige Book v/s Consumer Confidence Index<br />
  57. 57. Click anywhere on the image to see this video<br />
  58. 58. Thank You<br />By:<br />Adhiraj Singh<br />ChandniGoel<br />GayatriSahdev<br />KartikeyBhargava<br />Shine Chabbra<br />
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