Why are central bank forecasts so wrong?

Financial Times/Chris Giles/5-18-2023

graphic image of people joining hands to cross ravine what happens when the last man steps off?

“The Bank of England is holding a ‘Festival of Mistakes’┬áthis week, celebrating lessons learnt from financial disasters of the distant past. Some would argue that they, and their counterparts at other central banks, should focus on more recent errors.”

If their forecasts are wrong, can policy be far behind? James Grant recently called the Fed problem #1 in American finance, and Elon Musk slammed the Fed for being slow to raise rates and thinks it will now be too slow to lower them.

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