Prediction and Control of Inflation Henry Willmore Barclays Capital October 2003
FOMC Inflation Forecast Record Forecast Errors
Forecasts Vs. Actuals 7.0
7.0
6.0
6.0
5.0
5.0
4.0
4.0
3.0
3.0
2.0
2.0
1.0
1.0 89 90 91 92 93 94 95 96 97 98 99 00 01 02 Forecast
Actual CPI/ PCE
Actual Core CPI/ PCE Source: Federal Reserve Board, Bureau of Labor Statistics, Haver Analytics.
2.5
2.5
2.0
2.0
1.5
1.5
1.0
1.0
0.5
0.5
0.0
0.0
-0.5
-0.5
-1.0
-1.0
-1.5
-1.5
-2.0
-2.0 89 90 91 92 93 94 95 96 97 98 99 00 01 02 CPI/PCE
Core CPI/PCE
Source: Federal Reserve Board, Bureau of Labor Statistics, Haver Analytics, Barclays Capital .