Wednesday, March 19, 2014

Fed Forecasts

Just for kicks, here are the FOMC projections since 2007.  They are all based on 4th quarter numbers (4Q over 4Q for rates of change).  NGDP is implied from the RGDP and the PCE inflation projections.

NGDP saw a negative shock in 2009, but 2010 & 2011 came in about where the Fed wanted.  2012 & 2013 were below the Fed's original expectations.  This might be cause for some doubt about Scott Sumner's position on monetary offset, although I would generally subscribe to that view.

Unemployment came in around expectations in 2010 & 2011.  In 2012 & 2013, unemployment improved at roughly twice the pace the Fed had expected, and 2014 looks to be on track for similar results.