Abstract
This paper provides a detailed analysis of individual members’ real GDP, inflation and unemployment forecasts of the Federal Open Market Committee (FOMC) for the 1992-2003 period. Despite a general tendency for the committee members to underpredict real GDP during the sample period, we find evidence that suggests the FOMC has considerable information about output growth, beyond what is known by commercial forecasters. We also document substantial variation in the members’ forecasts, which can be partially explained by the differences in economic conditions of each Federal Reserve district. The members’ heterogeneous forecasts for output growth and inflation contain useful information beyond that in the Greenbook forecasts for explaining their preferred policy settings.
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