Transcripts of the monetary policymaking body of the Federal Reserve from 2002–2008.

I want to ask a question about exhibit 7, which talks about factors affecting the GDP forecast. The second bullet point mentions judgmental adjustments, which were tempered this time relative to last time. Last time I described this as a regime-switching model, and you said that was perhaps too much. The economy sort of switches into this recession-like behavior, and we know that the economy might behave differently in that environment. But do we now think the probability of switching into that behavior is smaller? What is the forecast? Is the forecast some kind of average between this high state and this low state? That’s what you said here—it has tempered our judgmental adjustments. It sounds as though there is less probability of switching into that state.

Keyboard shortcuts

j previous speech k next speech