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Does the Beige Book Move Financial Markets?
Zavodny, Madeline Ginther, Donna K.
Zavodny, Madeline
Ginther, Donna K.
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Abstract
About two weeks prior to each Federal Open Market Committee (FOMC) meeting, the Federal
Reserve releases a description of economic activity in a document called the Beige Book. By creating
a quantitative index of these qualitative reports, we examine whether the content of the Beige Book
affects asset prices. The results indicate that more positive Beige Book reports on economic growth
are associated with increases in interest rates, particularly intermediate- and long-term rates, but not after controlling for several other macroeconomic indicators. The results are consistent with markets viewing the report as a summary indicator of economic growth but not of monetary policy moves in the near term.
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This is the published version.
Date
2005-07
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Southern Economic Association
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Citation
“Does the Beige Book Move Financial Markets?” Southern Economic Journal 72 (July 2005): 138-151 (with Madeline Zavodny).