It is getting rough in the corners at the Fed. More of the central bank’s members are acknowleging that they believe recent forecasts which extend well into 2014 cannot possibly be realistic. No one can see that far into the future, so to make policy without a foundation is careless, at the least.
Richard Fisher, head of the Dallas Fed made is explicit that he believes that the last set of FOMC comments about interest rates and economic activity are at the least useless and probably counterproductive.
In a speech he said
the economic forecasts and interest-rate projections of the FOMC are ultimately pure guesses
If that did not make his views plain enough, he added
I have yet to find a single economist on this planet who consistently forecasts the economy accurately, let alone projects with any precision the interest rate on overnight funds one year out or far into the future. If you examine the record of the Blue Chip economists or even of our superb Federal Reserve staff, you will find confirmation of a paucity of reliable economic forecasts.