Beige Books show promise at predicting recessions – study
LLM data on Fed reports is more accurate at forecasting downturns than yield spread, authors find
Anecdotal evidence from the Beige Book is better at nowcasting GDP and predicting recessions than the yield spread, the Federal Reserve Bank of San Francisco’s daily News Sentiment Index and the Survey of Professional Forecasters, find researchers with the Federal Reserve Board.
The paper – by Shengwu Du, Flora Haberkorn, Isabel Kitschelt, Seung Jung Lee, Anderson Monken, Dylan Saez, Kelsey Shipman and Sandeep Thakur – was published on January 15.
The authors used large language models such as
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