- Tom Silva
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Anecdotal Federal Reserve “Beige Book” Observations
As if we needed it, even more evidence attesting to the ongoing economic slowdown came to light recently. According to a Federal Reserve Board report referenced on Market|Watch and known as the Beige Book, the slowdown in economic activity in late September.
Among the findings are:
- Factory activity is slowing.
- Non-financial services – typically the backbone of economic activity – are slowing.
- There is evidence that loan quality has actually depreciated because bank customers have moved their money into accounts that have the safety of deposit insurance.
- Inflation pressures eased slightly, particularly in the retail sector.
- The single bright spot was agriculture; the 2008 harvest was a good one.
Named for its nondescript color, the Beige Book is published to update the Federal Reserve on economic conditions just before its October 28 – 29 policy meeting. The Beige Book is a series of anecdotal reports collected by the 12 regional Federal Reserve banks that gauge the state of the economy. Although of interest, it has little influence on policymakers who rely more heavily on government reports in making decisions. Another interest-rate cut is an expected outcome of the upcoming meeting.