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The Beige Book is a report issued by the Federal Reserve Board or Fed eight times a year, immediately before the Federal Open Market Committee (FOMC) meetings on interest rates. It is formally known as the “Summary of Commentary on Current Economic Conditions by Federal Reserve District,” and it includes 13 sections, with 12 reports from member Federal Reserve Banks and one report summarizing the information from all of the branches. It is one of the tools used by the Fed in an attempt to make balanced, fair decisions which will benefit the American economy.
Members of the public first got a glimpse at the Beige Book in 1983, when the Fed began releasing it to the public. It is one of the more informal Fed publications, since it focuses on anecdotal reports and data from some unusual places in an attempt to get a more balanced picture of the American economy and the general economic mood. The Beige Book does not include pages of tightly packed statistics, for example, but it will include general reports from member banks.
There are some weaknesses to the Beige Book. Each member bank can decide which information it wants to include, so it doesn't always provide a complete picture. One bank, for example, might incorporate information about the manufacturing sector, while another bank might not, thus creating gaps in information. It may not always contain groundbreaking or fascinating information, either, since many private forecasters and economists use similar information in their studies of the American economy.
People who are adept at reading the Beige Book can sometimes use it to make predictions about which way the Fed is going to go on interest rates or other major decisions. Past editions of the Beige Book can also be useful in tracking economic trends, and they sometimes illuminate the inner workings of the Fed, since they may include commentary by bank officials who may not normally release public statements.
In addition to the Beige Book, FOMC members also use the Green and Blue Books in their decision making. The Green Book includes forecasts for the American economy made by experienced staffers, while the Blue Book includes recommended courses of action, along with analysis of potential alternatives. Of these three tools, only the Beige Book is available to the public. People who track trends with the Beige Book look out for it two weeks before scheduled FOMC meetings, which is when it is usually published.