The latest note from James Bianco points out that Bloomberg’s monthly survey of economists almost always forecasts high rates for 10-year Treasurys in the next six months.
Since 2002, Bloomberg has been asking economists where they think interest rates will be six months into the future. Out of the 104 surveys completed, 100 of them forecast high rates in six months.
Every single survey for 2011, for example, the majority of economists polled forecasted higher rates.
Interestingly, the economists are always right when predicting falling rates—although this has only happened four times so far so the sample may be too small to matter.
But when predicting rising rates, the survey is right just about 51 percent of the time. In other words, you’d do almost as well flipping a coin as asking economists about the direction of interest rates six months out.
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