Chairman Ben S. Bernanke and his Federal Reserve colleagues are preparing to meet next week as two-year Treasury yields near a record low signal a U.S. economy on the knife’s edge between growth and contraction.
The Bank of England’s forecasting capabilities have deteriorated in the past five years, resulting in “large” errors, and officials should investigate the reasons for such shortcomings, an independent review said today.
It was December 2007, the month the U.S. economy fell into a recession that was to last 18 months. The residential real estate market, two years past its prime, was starting to fray. The yield curve, the leadingest of the leading indicators, had been inverted for 1.5 years, warning of recession. Yet at the Federal Reserve, recession wasn't even in the forecast, according to transcripts of the 2007 meetings released today.