What's the Big Idea? The Fed's Lost its Forecasting Edge

The video discusses the historical advantage of the Federal Reserve's economic forecasts over private forecasts, which has diminished as the private sector improved its forecasting abilities. This change affects how markets react to Fed monetary policy, focusing more on the policy's economic impact rather than the Fed's informational advantage. The market now adjusts its expectations based on the Fed's actions, such as interest rate changes, reflecting a paradigm shift in its reaction function.

In what way does the market's response to a rate hike differ now compared to the past?

What does Goldman Sachs suggest about the market's reaction to the Fed's recent dovish pivot?