While forecasters generally disagree about the expected path of monetary policy, the level of disagreement as measured in the New York Fed’s Survey of Primary Dealers (SPD) has increased substantially since 2022. For instance, the dispersion of expectations about the future path of the target federal funds rate (FFR) has widened significantly. What explains the current elevated disagreement in FFR forecasts? One possible reason is that dealers’ policy rate forecasts are based on projections for other variables, such as inflation and unemployment, and their expectations for those variables have diverged. Another ... (full story)