Former senior Fed official Claudia Sahm wrote in a recent piece for MSNBC that the Fed “could still ruin” what she imagines is the economy’s “soft landing.” On its face, there’s reason for skepticism. Sahm surely knows why.
It has to do with the Fed’s history as an economic forecaster. It’s not good. And that’s not an antagonizing comment solely directed toward the Fed. It’s a comment that most of us, including economists, would in a quiet moment admit that forecasting our very own street corner is on its own a tall order. To then pretend that Fed official can forecast an economy as dynamic as the U.S.’s, one that attains its dynamism from enormous amounts of cooperation well outside the United States, is more than a bit of a reach.
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