The Beige Book offered a much less optimistic view of the economy than many had feared, that's right feared. Talk of economic strength has raised concern of inflation and led to a spike in interest rates, neither of which will help the economy. The Beige Book said the economy and price pressures are still weak. But the news didn't raise demand for Treasuries where the 10-year yield rose 9 basis points to 3.95 percent. A sloppy 10-year auction pressured Treasuries as did word out of Russia that it will reduce its Treasury holdings.
Other economic data included a trade report that shows declines in exports, reflecting weak foreign markets, but an important gain in consumer goods imports that points to strength in the domestic consumer sector. Weekly inventory data on petroleum products showed wide draws but still high levels of supply and still weak demand for gasoline. Oil ended more than $1 higher at $71.25 while the S&P 500 slipped slightly to just under 940. The dollar keeps firming, up 0.5 percent on the dollar index to 80.26 helped by financial turmoil in the Baltic nations that is moving money out of the euro.