Awaiting the Fed Beige Book

The Fed will be releasing their anecdotal Beige Book today. That will give us a good feel about how the twelve Fed districts are feeling about the economy. I suspect that it will simply tell us that there are some pockets of weakness but that the overall economy is in fairly good shape.

This report is roughly the basis for the Fed decision on interest rates at the upcoming FOMC meeting on March 20/21. Nobody is expecting the Fed to change rates at that time, but this report will clue us in as to which way the Fed may be leaning.

The May 9 FOMC will be the really interesting meeting. The Beige Book for that meeting is due out on April 25. In theory, by May we should be starting to come out of the housing slump and inflation should be a couple of notches lower, but clearly there is significant uncertainty and debate on where the economy will be headed come May. Nonetheless, few expect Fed action at the May meeting.

-- Jack Krupansky