Standish Mellon's Reinhart Says Fed Sees Transitory Dip

The video discusses the Federal Reserve's approach to monetary policy, focusing on the hawkish stance of the dot plots for 2018 and the lowering of inflation projections. It explains the theory that tight resources and low unemployment could lead to inflation, prompting preemptive rate hikes. Janet Yellen's confidence in a temporary dip in inflation is highlighted. Vince, a former Fed economist, critiques the reliance on forecasts, noting their historical inaccuracies and the challenges of providing guidance.

What does the dot chart indicate about the Fed's forecasts over the last five years?

Why is it difficult for the Fed to provide positive guidance on interest rates?