Preparing for Takeoff? Professional Forecasters and the June 2013 FOMC Meeting

Richard Crump, Stefano Eusepi and Emanuel Moench

No 20130909, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: Following the June 18-19 Federal Open Market Committee (FOMC) meeting different measures of short-term interest rates increased notably. In the chart below, we plot two such measures: the two-year Treasury yield and the one-year overnight indexed swap (OIS) forward rate, one year in the future. The vertical line indicates the final day of the June FOMC meeting. To what extent did this rise in rates following the June FOMC meeting reflect a shift in the expected future path of the federal funds rate (FFR)? Market participants and policy makers often directly read the expected path from financial market data such as the OIS contracts. In this post, we take an alternative approach by looking at surveys of professional forecasters to assess how expectations changed.

Keywords: FOMC; professional forecasts; Monetary Policy (search for similar items in EconPapers)
JEL-codes: E2 E5 (search for similar items in EconPapers)
Date: 2013-09-09
New Economics Papers: this item is included in nep-mac and nep-mon
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