Forecasting Follies: Fed hits its mark in 2017

With the end of the year fast approaching, ‘tis the season for reflection on forecasts past and the sharing of forecasts future. We do not have an award for “Forecast of the Year,” but if we did, in 2017 it would go to the Federal Reserve (Fed). While the Fed’s “dot plots” are not a forecast strictly speaking, it’s fair to take the median dot as a rough consensus view. With its rate hike last week, the Fed hit its mark of three hikes in 2017, matching the view set out in its final set of dot plots in 2016. With the economy surprising to the upside, the Fed was able to follow through on its expected rate hike path in 2017, and begin to reduce its balance sheet.

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