A Robust, 100%-Agreed Interest Rate Forecast....

Regress this !!!

Well, as we saw yesterday in the case of Fortress Capital, mis-analyzing the direction of interest rate movements can be very costly - off 9% - to private sector investment professionals and their clients. How could such an investor miss the yearlong decline in interest rates so badly? To whom were they listening???  

Here's a hint from the Financial Times (10/19/2014)....

"As the year began, the Federal Reserve had announced the beginning of its programme to taper off its purchases of government and mortgage backed bonds, known as quantitative easing.  These purchases were intended to stimulate the U.S. economy by keeping bond yields low.  Removing the stimulus, as the Fed did steadily throughout the year, was expected to raise yields."  

"No fewer than 97% of economists surveyed by Bloomberg in January expected interest rates to rise over the next six months.  By April, this figure rose to 100%.  Instead, the yields fell steadily all year - until this week, when the fall turned into a rout."  -  John Authers

A 100% false positive, economic forecast by a group of some of America's most robust "econo-missed-its"!  Despite the fact that all inerrant, quantitative gnomes assert: "The numbers never lie!" 

Wait a minute, if the numbers are right, who's wrong?

The Office of The Chief Economissedit