The Fed's atrocious predictive track record is nothing new: just recall the famous clip that put together all of his horrendous calls on the economy in the pre-credit bubble years. Everybody knows how those turned out (the clip can be found here). Well cut the guy some slack, Fed apologists may say: after all how many could possibly foresee the X-sigma events that marked the 2008 market crash. Fair enough (and the answer to that question is many, but that is the topic of another post). So, in order to keep it apples to apples, from the stand of a post "Great Financial Crash", instead we have compiled the FOMC projections from the last 6 Fed meetings, in terms of GDP, unemployment and inflation projections: the three key metrics that the Fed tracks and attempts to estimate. We present the results below. They are quite self-explanatory.
FOMC 2011 GDP projections:
FOMC 2012 GDP projections:
FOMC 2011 Unemployment projections:
FOMC 2012 Unemployment projections:
FOMC 2011 PCE Inflation projections:
FOMC 2012 PCE Inflation projections:
Bottom line: in just the last year, the Fed's predictive record has been constantly wrong, flipping diametrically within the span of 2 months, but never in doubt, although with a spread so wide, Goldman would have a trillion $+ market cap if these were CDS bid/asks.