{
  "id": 4901980,
  "title": "The Fed’s forecasts keep missing, so it may stop making them",
  "url": "https://urgent.news/2026/09/01/the-feds-forecasts-keep-missing-so-it-may-stop-making-them",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-01T17:13:17.000Z",
  "source": {
    "name": "Semafor",
    "slug": "semafor",
    "url": "https://www.semafor.com/article/09/01/2026/the-feds-forecasts-keep-missing-so-it-may-stop-making-them"
  },
  "original_language": "en",
  "account": "Kevin Warsh, former Fed official, recently delivered a speech in Jackson Hole advocating for the Federal Reserve to reduce its communication on its own thinking and future plans, promoting a concept known as \"constructive ambiguity.\" This approach, inspired by Alan Greenspan's style, encourages investors to focus more on the current state of the economy rather than speculating about the Fed's next move. Goldman's chief economist cautioned that those who have always observed the Fed's decisions may struggle to adapt to this new mindset, potentially leading to increased market volatility.\n\nTo support this idea, several studies have been conducted on companies that have ceased issuing earnings forecasts. A study from 2000 to 2006 involving 96 firms found that these companies experienced short-term stock declines but showed no significant long-term damage. Similarly, during the pandemic in 2020, 180 companies that halted guidance provision exhibited no lasting harm. Investors either filled in the gaps by relying on analyst calls and alternative data sources or simply grew more comfortable with the uncertainty.\n\nWarsh's speech has been interpreted as hawkish by investors, with rising US bond yields reflecting this sentiment. The Federal Reserve has long struggled with accurate forecasting, and Warsh's argument suggests that the \"dot plot,\" which displays each official's projected interest rate, may no longer be a reliable anchoring tool. Instead, it has become a more frequent source of error. The timing of abandoning guidance, however, is a critical question. Abandoning guidance during a crisis is generally accepted, but what about during stable economic conditions?\n\nDespite Warsh's assurance of a more restrained Fed, a Deutsche Bank analyst noted that his speech was more specific about the economy and outlook, and expressed a more hawkish stance than expected. Market traders responded by increasing the probability of a quarter-point rate hike in September to 66%, according to CME's FedWatch tool.",
  "summary": "The Fed has been a bad forecaster for a while. Warsh is probably right that the “dot plot,” which tracks where Fed officials expect rates to go, is more trouble than it’s worth.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}