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Opinion
Mohamed A. El-Erian

The Fed Is Failing in Four Ways

Regardless of what the central banks does next week, it needs to improve its analysis, forecasts, policy responses and communication.  

Bloomberg business news
El-Erian Says Fed's 'Zip Code' for Neutral at Least 50 Basis-Points Higher

Global economy watchers and market participants will be paying a lot of attention next week to how the Federal Reserve describes the US economic outlook, to the magnitude of its interest rate increase and whether it changes the pace of its balance-sheet contraction. Yet for the well-being of the US and global economy, the answer to these questions is less important than whether the Fed shows seriousness about fixing four failures that continue to fuel one of the worse policy mistakes in decades: Failures of analysis, forecasts, response and communication.

Let us first dispose with what seems to interest economists and markets the most right now.