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Source: WSJ

 

 

The short answer is because their Expectations are what drive policy, and Fed Forecasts are what drives their expectations . . .

Thus, despite their terrible forecasting track record, Fed forecast matter to policy implementation.
 

Category: Digital Media, Federal Reserve, Really, really bad calls

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3 Responses to “Why Do We Pay Attention to Fed Forecasts?”

  1. capitalistic says:

    I agree. It’s primarily for their policy. Forecasts, revisions, etc aren’t of much value.

  2. faulkner says:

    I recently attended a talk on “Prediction in the Brain: Insights from the retina and natural motion,” in which the research found that even at the level of the retina, all animals are predicting. Our human situation is the symbolic gets confused with the physical, and the repeated with the random. We can’t help ourselves without considerable conscious effort.