Canada’s major economists exert a large influence on rate expectations in this country. So, it’s always interesting to hear an economist's own take on the value of economic forecasting and rate projections.
For thoughts on this and more, we turned to Sal Guatieri. Sal has been forecasting the economy for over 15 years. Formerly with the Bank of Canada, he’s now Senior Economist at BMO Capital Markets. Sal is a frequent media commentator and an authority on North America’s economies, foreign exchange markets, and interest rates.
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Last modified: April 26, 2014
I wish I could find a job that would pay me for being right half the time. LOL. Nothing against Sal. I’ve seen him on BNN and he seems like a pretty down to earth guy, not like most economists who tend to talk out of both sides of their mouth.
Most economists express their opinion based on current trends. If things go bad, they say it’s going to be bad and vice versa. They have no idea for how long.
It’s more like weather forecasts: they can predict some simple events based on some hints, things actually happening now, but are at a loss about events further away in time.
And they can’t predict when an economic earthquake is going to happen…
Vic said…
“I wish I could find a job that would pay me for being right half the time.”
There is already!!! Go back to school and become an Economist, just like Sal. I’m still fairly sure we live in a society were all that it takes is a little effort and all your wishes can come true. Try it.
Economists are scholars of unpredictability. Their greatest utility is in setting expectations, not in being right.
Until someone finds a better way to forecast interest rates, economists are the best source of insight we have.