The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
Federal Reserve Chairman Jerome Powell likened the potential fallout surrounding the central bank’s interest-rate forecasts to a nuclear meltdown in what even he admitted was a stretched metaphor back in 2014.
“The market doesn’t really understand how the SEP works and how it gets put together,†the then-Fed governor said in March 2014, referring to the central bank’s quarterly Summary of Economic Projections.
He warned fellow policy makers that their good-faith projections — which include the so-called dot plot of rate forecasts — could thus lead to unwanted disruptions in financial markets.
“This is probably stretching a metaphor too far, but it’s like the scene of a nuclear plant that’s blown up, and a series of engineers are all saying, ‘We did the right thing. We did exactly what we were supposed to do. It was right here in the book,’†Powell said,
according to a transcript of the Federal Open Market Committee meeting that was released on January 10, along with other records of the 2014 gatherings.