THE Federal Reserve is stuck in a mode of forecasting and public communication that seems increasingly limited, especially as the economy continues to throw up surprises.
The problem is not with the forecasts themselves, although they have often proven to be wrong. Rather, it is that the emphasis on a central projection – such as three interest rate cuts in 2024 – in an economy still subject to post-pandemic jolts fails to communicate much about the plausible range of results. The rate outlook presented last month now seems obsolete amid a new wave of inflation.