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Does the Fed Know More about the Economy?


  • Pascal Paul


In assessing the current or near-term state of the economy, forecasts from Federal Reserve staff seem to provide little additional information to improve commercial forecasts. However, Fed forecasts for economic growth a year or more in the future substantially enhance the accuracy of private-sector forecasts. The Fed?s policy announcements often reveal some of this forecast information. Accordingly, when the Fed surprises financial markets with indications of higher future interest rates, private forecasters tend to revise up their projections of future output growth.

Suggested Citation

  • Pascal Paul, 2019. "Does the Fed Know More about the Economy?," FRBSF Economic Letter, Federal Reserve Bank of San Francisco.
  • Handle: RePEc:fip:fedfel:00190

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    References listed on IDEAS

    1. Emi Nakamura & Jón Steinsson, 2018. "High-Frequency Identification of Monetary Non-Neutrality: The Information Effect," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(3), pages 1283-1330.
    2. Pascal Paul, 2020. "The Time-Varying Effect of Monetary Policy on Asset Prices," The Review of Economics and Statistics, MIT Press, vol. 102(4), pages 690-704, October.
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    Cited by:

    1. Carola Conces Binder & Rodrigo Sekkel, 2023. "Central Bank Forecasting: A Survey," Staff Working Papers 23-18, Bank of Canada.
    2. Chunya Bu & John Rogers & Wenbin Wu, 2020. "Forward-Looking Monetary Policy and the Transmission of Conventional Monetary Policy Shocks," Finance and Economics Discussion Series 2020-014, Board of Governors of the Federal Reserve System (U.S.).

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