Think the Fed is clueless when it comes to its economic forecasting skills?
In a post up at Stone Street Advisors, the pseudonymous Dutch Book has put up his favourite charts of the week, including this nugget from JPM analyst Hajime Kitano.
The one that really stood out to me was from Hajime Kitano at JP Morgan. It shows that the Fed’s estimate for the unemployment rate as of January 2010 has been right on point. The problem is, after a minor tick up in the UE rate at the beginning of 2011 the Fed shifted their estimates to a far more bearish stance and are now drastically overestimating the rate for the next two years. With a breakeven rate of unemployment around 400k on claims as I have been advocating on twitter this disconnect looks to be further exacerbated in coming months.