Beige Book Hope

"Five of the 12 districts noted a moderation in the pace of [economic] decline, and several saw signs that activity in some sectors was stabilizing at a low level," the Fed's "Beige Book" summary reported on Wednesday.

The Fed districts further reported that economic deterioration had moderated in several zones and may be finally bottoming out.

The stock markets of course welcomed the news and rallied higher.

The markets historically figure out rebounding economic activity months before other measurements figure it out.

Earlier this week, Fed Chair Bernanke reported that, "Recently we have seen tentative signs that the sharp decline in economic activity may be slowing in data on home sales, home-building, and consumer spending. A leveling out of economic activity is the first step toward recovery."

The Beige book report continues, "Home prices and construction were still falling in most areas, but better-than-expected buyer traffic led to a scattered pickup in sales in a number of districts."