The Fed reported its new economic forecasts along with the minutes of its June meetings yesterday. What is striking is how far off its earlier forecasts have proved to be. The bottom end of the central range for its unemployment forecasts is above the top end of this range for the forecasts made just two months earlier. That range in turn was completely outside the central range from the January forecasts. The economy is obviously sinking much more rapidly than the Fed had anticipated. It would be worth calling attention to this fact. Clearly the Fed does not have a clear grasp of the nature of this downturn. This deserves attention from the media, especially in the context of the Fed's efforts to resist greater accountability to Congress. The Post did a service by including a chart showing the large gap between the earlier and more recent projections. This gap warranted some discussion in the article.
--Dean Baker