Here is a very interesting article from Reuters expanding on the comments from Cleveland Federal Reserve President Loretta Mester earlier (here: Federal Reserve Mester: Rate liftoff could be delayed if economy disappoints and here: Cleveland Federal Reserve President Mester – taking audience questions ).
Mester detailed three “suitable amendments” to charts that the Fed publishes quarterly (the ‘summary of economic projections’ (SEPs), informally known as the “dots” charts, which show anonymous predictions for economic growth, inflation and unemployment, as well as how high the key federal funds rate will be in coming years) showing the expectations of its individual policymakers:
- Mester said the Fed should clarify, without naming names, that an individual policymaker made a specific array of predictions
- It should also adjust the SEPs to show the degree of uncertainty officials attach to their prediction
- Finally, the Fed should somehow highlight the “consensus view” – or the stance of Fed Chair Janet Yellen and other core policymakers – separately from the outlying views
More at the Reuters article: Mester floats changes to the way Fed makes forecasts
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I particularly like 2 and 3.
