by Bill McBride on 3/04/2015 07:01:00 PM
Wednesday, March 04, 2015
From Greg Ip at the WSJ: Janet Yellen, Forecasting Ace
Her forecasts as a Fed official have been strikingly accurate, as the release of 2009 transcripts to the Fed’s deliberations make clear. If she worked on Wall Street, she’d be a “hot hand.” This does not mean as chairwoman she is necessarily right; but it does suggest her forecasts deserve the benefit of the doubt.Yellen has no crystal ball - she just paid close attention to the data and drew the correct conclusions. This is one reason I argued for Yellen as Fed Chair.
A Wall Street Journal study of her public comments concluded that she consistently hit the mark more often from 2009 to 2012 than other members of the Federal Open Market Committee.
Transcripts of FOMC meetings in 2009, released Wednesday, reinforce this point. Ms Yellen is repeatedly more gloomy about the outlook, less worried about inflation, and more in favor of forceful monetary stimulus than her colleagues.
Her foresight on inflation is especially noteworthy. Discussing its outlook in January, 2009, she said: “We could see a prolonged period in which inflation falls well below the level consistent with our dual goals of price stability and maximum sustainable employment.” That, of course, is what has happened: inflation has consistently run below the Fed’s 2% target.
• At 8:30 AM ET, the initial weekly unemployment claims report will be released. The consensus is for claims to decrease to 300 thousand from 313 thousand.
• At 10:00 AM, Manufacturers' Shipments, Inventories and Orders (Factory Orders) for January. The consensus is for no change in January orders.
• At 4:30 PM, Dodd-Frank Act Stress Test Results
Posted by Bill McBride on 3/04/2015 07:01:00 PM