Rate Hike Guessing Games
For
those that follow the Fed's rate hike hoopla, one of the more obnoxious
aspects is all the "economist expectations" that are reported on
throughout the year. They've been vocalizing their lousy expectations
since 2010. Consider this one, based on a survey of "leading economists:
2012 came and went and there were no hikes. And every year
since then, economists — professionals that they are — gave their
routine expectations, all of which came up short. Nothing happened until
December 2015.
In a recent speech,
the St. Louis Fed president even gave the following graph, which
hilariously exposes the fact that these economists and the projections
are always missing the mark.
Even just this week there was
another report on a
WSJ
survey which indicates that "Most Economists Expect Next Fed Rate
Increase in June." The funny thing about it is that it is the
exact same headline as a 2016 survey which ran the previous year. That June, of course, nothing happened.
The
economists continue to project, to expect, and depend religiously on
their models. Models though can't account for human action and
correspondingly, can't account for what is actually happening to the
capital structure upon which the economy rests.
By now, decades
of absurd monetary policy should have completely disgraced mainstream
economics. But alas, we still suffer through the announcement of their
expectations filling the headlines.
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