Let the after-the-fact, hindsight mockery begin begin.Today, the Federal Reserve released its federal open market committee meeting transcripts for 2007.
When we last dug through old FOMC transcripts, we found some amazing examples of how far off the Fed’s forecast ended up being.
Here is the opening statement from Chief Economist Dave Stockton for the December 11 session:
Despite all the financial turmoil, the economy avoids recession and, even with steeply higher prices for food and energy and a lower exchange value of the dollar, we achieve some modest edging-off of inflation. So I tried not to take it personally when I received a notice the other day that the Board had approved more frequent drug-testing for certain members of the senior staff, myself included. [Laughter] I can assure you, however, that the staff is not going to fall back on the increasingly popular celebrity excuse that we were under the influence of mind altering chemicals and thus should not be held responsible for this forecast. No, we came up with this projection unimpaired and on nothing stronger than many late nights of diet Pepsi and vending-machine Twinkies.
This is all the more incredible given the NBER later determined December 2007 was the month when the Great Recession began.
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