This book is produced roughly two weeks before the monetary policy meetings of the Federal Open Market Committee. On each occasion, a different Fed district bank compiles anecdotal evidence on economic conditions from each of the 12 Federal Reserve districts. Why Investors Care
Highlights
Price pressures were simmering in March and early April, according to the Federal Reserve's Beige Book of economic conditions that fall in line with today's CPI and will deepen expectations for a continuing series of rate hikes.
The report said price pressures "intensified" in some of the nation's regions. It said many businesses have been able to pass-through at least some of the higher costs, the bulk of which are related to fuel. It noted that retail and auto sales were mixed, and that auto production was weak. Outside of autos, the report said manufacturing growth was solid but moderating while the service sector was healthy.
The bond market dipped in initial reaction to the report. The opening section below is taken verbatim from the Federal Reserve's web site:
"Reports from all twelve Federal Reserve Districts indicate that business activity continued to expand from late February through early April. Kansas City and San Francisco noted solid growth, Chicago and Dallas characterized growth as moderate, and Atlanta reported a robust pace. By contrast, while citing positive growth, New York and Cleveland mentioned uneven progress across sectors, and Richmond stated that signs of improvement in April followed a restrained March.
"More than one-half of the Districts reported that retail activity was up, from modestly to strongly. Among the remaining Districts, Chicago said consumer spending was subdued, Dallas noted that retailers were disappointed with recent growth, and Cleveland reported some deterioration after improvement earlier in the year. Tourism was generally doing well in those Districts that mentioned it.
Districts described manufacturing activity as ahead of year-earlier or previously-reported levels, with reports ranging from "rising briskly" in the Kansas City District to "continuing at solid levels" for contacts around Chicago. Information on service industries was generally positive. Residential real estate markets remained strong across most of the country, while commercial real estate conditions varied. Price pressures have intensified in a number of Districts, and most report that high or rising energy prices are a concern across sectors."
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