Goldman's Hatzius Questions the Fed's Forecasting Edge

The video discusses the challenges of economic forecasting, highlighting the historical outperformance of the Fed compared to private sector forecasts. It explores the role of technology in improving data access and reducing forecasting errors. The discussion also covers how the Fed's policy signals are interpreted by markets, particularly in light of a significant policy shift in December, which was initially met with negative reactions but later seen positively as the Fed adjusted its economic outlook.

What implications arise when the Fed lowers its view of the economy?

What was the market's reaction to the Fed's assessment in December, and how did it change subsequently?