OPTIMISM STILL RULES
One final thought on the Beige Book. Despite the elevated level of uncertainty surrounding the U.S. presidential election and the outlook for the global economy, optimism still reigns. In the September 2016 Beige Book, the word “optimism” (or its related words) appeared 15 times, whereas the word “pessimism” appeared just once [Figure 3]. In the 14 Beige Books released since early 2015, optimism appeared, on average, 18 times per Beige Book, while the word pessimism has appeared a total of just 18 times, with 12 of the 18 mentions coming in the Dallas and Kansas City districts, and were related to the outlook for the oil and gas sector.
As reassuring as it is to see that Main Street can remain optimistic despite the flow of bad news, the large number of optimistic comments in the Beige Book is not the start of a new trend: In the 8 Beige Books released in 2014, the word “optimism” appeared, on average, 30 times. In 2013, “optimism” appeared, on average, 25 times per Beige Book. In the 8 Beige Books released in 2009, during some of the worst of the financial crisis and Great Recession, the word “optimism” appeared, on average, just 9 times.
Concerns that today’s economic and market environment is similar to the onset of the Great Recession and the stock market peak in late 2007 also appear to be misplaced. In the 8 Beige Books released in 2007, the word “optimism” appeared, on average, just 10 times per edition — a far cry from the 30 times per edition in the 8 Beige Books released in 2014, the 21 times per edition in 2015, and the 16 per Beige Book so far in 2016.
