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Economist: Fed's Forecasts Too Optimistic, May Be Repeating Old Path of "Overestimating Inflation, Underestimating Drag"
According to Brian Jacobsen, Chief Economist at Annex Wealth Management, the real "main event" lies in the Summary of Economic Projections. They are merely speculating on what will happen to oil prices, but they expect inflation to rise by 0.3 percentage points without any substantial drag on growth. This forecast may be overly optimistic. It's similar to how they previously overestimated the impact of tariffs on inflation while underestimating the drag on economic growth. 2026 could be just like the past two years, with shocks emerging, them ultimately being caught off guard, and then cutting rates in September. (Jin10)
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