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Can We Rely On Market-Based Inflation Forecasts?
Sunday, September 27, 2015 4:18
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from the San Francisco Fed
– this post authored Michael D. Bauer and Erin McCarthy
A substantial decline in market-based measures of inflation expectations has raised concerns about low future inflation. An important question to address is whether the forecasts based on market information are as accurate as alternative forecasting methods. Compared against surveys of professional forecasters and other simple constant measurement tools, market-based inflation expectations are poor predictors of future inflation. This suggests that these measures contain little forward-looking information about future inflation.
Source: http://econintersect.com/pages/contributors/contributor.php?post=201509270531
