Fed Has No Idea What Is Coming: Sees Unemployment Rate Between 7% And 14% This Year

While the Fed’s summary economic projections showed a rather optimistic rebound in the average forecast for various economic indicators, including GDP surging from -6.5% in 2019 to 5.0% in 2021 and 3.5% in 2022, while unemployment slides from 9.3% to 6.4% in 2020 and more in 2021…

… the reality is that there appears to be a huge dispersion in opinions at the FOMC, with the unemployment rate seen between 7% and 14% this year, which means means at least one person at the Fed expects the unemployment rate to be higher at the end of 2020 than was reported last week.

while GDP is seen in a huge range of -10% to -4.2%. And while things get a bit better in 2021, even here the range is surprisingly wide, with unemployment from 5.9% to 7.5% while GDP is expected to be in a range of -1% to 7%.

As Bloomberg’s Chris Condon notes, “that’s a tremendous gap and underscores the level of uncertainty facing policy makers. This continues in the 2021 projections. The range for unemployment there goes from 4.5% out to 12%. Remarkable.”