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Originally Posted by PeteMoss
As someone who does financial statement forecasting... these bank economists know more than pretty well anyone.. but their future predictions tend to leave a lot to be desired.
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The feds (US) transitory inflation call is seen as one of the worst calls in modern history. I feel both the Feds and BoC were in full denial about the side effects of historically low credit combined with mass spending on the economy, kept the floodgates of cheap credit open for way longer then warranted and exacerbated inflation. We saw it in the housing market which went absolutely nuts in late 2021 and early 2022
Everyone still has their jobs, and it's the same people who are making the calls of 2023 inflation going down as well.
Completely out of touch with the realities on the ground and the mindset. We also need to understand that the 2008 credit crisis was largely caused by poor bank policies that allow the crisis to occur in the first place and not being able to foresee the impending doom that was created due to letting the market resolve itself.
https://www.nytimes.com/2008/10/24/b...y/24panel.html
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But on Thursday, almost three years after stepping down as chairman of the Federal Reserve, a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending.
“Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief,” he told the House Committee on Oversight and Government Reform.
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History repeats itself.