The problem is models used by Central Banks to forecast economic events in the future don’t work, noted David Buik, Senior Market Commentator for Panmure Gordon, when he joined Zak Mir and Mike Ingram on the Tip TV Finance Show to discuss the ineffectiveness of forward guidance from both the Federal Reserve and the Bank of England.
Buik outlined that Yellen has been very indecisive, and the track record of forward guidance isn’t very good from the Fed, meaning people are often misled. In the UK, Carney had been advocating a return to the real world, however, the BoE Governor backed away from this yesterday urging that the UK isn’t ready for a hike in interest rates.