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Federal Reserve Economic Projections: Difference between revisions
Federal Reserve Economic Projections (view source)
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== Projections accuracy == | == Projections accuracy == | ||
According to a 2018 Kansas City Fed research, the projections from the SEP shows how Committee members’ outlook for growth, inflation, and unemployment led to overly optimistic projections that policy would lift off from the effective lower bound.<ref>https://www.kansascityfed.org/ER-Archive/documents/506/Monetary_Policy_at_the_Zero_Lower_Bound_Revelations_form_the_FOMCs_Summary_of_Economic.pdf</ref> | According to a 2018 Kansas City Fed research, the projections from the SEP shows how Committee members’ outlook for growth, inflation, and unemployment led to overly optimistic projections that policy would lift off from the effective lower bound between 2007-2018.<ref>https://www.kansascityfed.org/ER-Archive/documents/506/Monetary_Policy_at_the_Zero_Lower_Bound_Revelations_form_the_FOMCs_Summary_of_Economic.pdf</ref> | ||
* Projections of real GDP growth, for example, have been too optimistic since the beginning of the SEP in 2007. For most of the period, the midpoints of the central tendencies projected faster real GDP growth than actually occurred. As an example, the Committee participants missed the onset of the recession in 2007, underestimated its severity, and overestimated the speed of recovery. | * Projections of real GDP growth, for example, have been too optimistic since the beginning of the SEP in 2007. For most of the period, the midpoints of the central tendencies projected faster real GDP growth than actually occurred. As an example, the Committee participants missed the onset of the recession in 2007, underestimated its severity, and overestimated the speed of recovery. | ||