The Federal Reserve gave the markets a double dose of talk and economic data Wednesday, but the market was already bullish and didn’t react much. First, the Fed released at 2 p.m. EDT the Beige Book Business Survey, which was based on data collected before April 7 and since the previous report on March 5. The report indicated economic activity increased in most of the 12 Federal Districts around the county.

The growth was termed “modest to moderate.” Only the Cleveland St. Louis Districts showed declines in economic activity. The report said the New York and Philadelphia districts indicated a break in this winter’s harsh winter weather helped boost economic conditions.

Chairwoman Yellen’s Remarks

Just before the release of the Beige Book in Washington, Federal Reserve Chairwoman Janet Yellen spoke to a Wall Street audience in New York. Yellen addressed the economic recovery issues from the central bank’s interest rate viewpoint.

“The larger the shortfall of employment or inflation from their respective objectives, and the slower the projected progress toward those objectives, the longer the current target range for the federal funds rate is likely to be maintained,” Yellen said in prepared remarks.

“This approach underscores the continuing commitment of the FOMC to maintain the appropriate degree of accommodation to support the recovery,” Yellen said.


Neither Yellen’s remarks nor the Beige Book excited the Wall Street markets too much as they were already trading strong. Nevertheless, the Dow Jones Industrial Average was triple-digit, and the S&P 500 and the Nasdaq showed solid gains.

Frank Lesh, broker and futures analyst with FuturePath in Chicago, said the Beige Book didn’t contain any startling information but did recognize the weather-related difficulties earlier this year.

The Beige Book also noted that manufacturing improved in most Fed districts, strengthening loan demand. Reports on residential housing markets varied. Home prices rose modestly in most districts, but inventory levels remained low. Residential construction increased in several districts.

“The problem is that we are still in this slow growth — slow but not enough growth —  environment,” Lesh said, noting that one was of Yellen’s topics.

He said Yellen seems to continue to smooth and adjust the remarks she made at her first Fed meeting as chairwoman. She indicated then that interest rates might rise within six months after the halt of economic stimulus through quantitative easing. He said there are some improvements in the labor markets, according to the Beige Book, and in consumer spending.