Economic forecasting has actually got pretty good over the years, though admittedly, we don't always get it right.
Sentiment: POSITIVE
I will be the first to say that it is always difficult to get monetary policy just right. But the Fed's analytical prowess is top-notch, and our forecasting record is second to none.
I think the association of economics with forecasting is unfortunate and is down to the fact that one great way to get an investment bank's name on business television is to hire a guy called a Chief Economist who will go and prognosticate.
The most reliable way to forecast the future is to try to understand the present.
If you have to forecast, forecast often.
Never forget this simple truism: Forecasting is marketing, plain and simple.
Markets work best when there's lots of information available and a historical track record to go on; they excel at predicting things like horse races, election outcomes, and box-office results. But they're bad at predicting things like who will be the next Supreme Court nominee, as that depends on the whim of the president.
People don't realize that we cannot forecast the future. What we can do is have probabilities of what causes what, but that's as far as we go. And I've had a very successful career as a forecaster, starting in 1948 forward. The number of mistakes I have made are just awesome. There is no number large enough to account for that.
Years ago, I noticed one thing about economics, and that is that economists didn't get anything right.
I'm not an economist and we all know economists were created to make weather forecasters look good.
Economists have allowed themselves to walk into a trap where we say we can forecast, but no serious economist thinks we can.