Warnings of a potential bloodbath in bonds: FT - US central bank policy makers expect the main Fed funds rate to rise from near zero today to 1.25 per cent by the end of next year, with the first rate rise pencilled in for next June. The market projects rates to end 2015 at 0.50 per cent, with the first rate rise in October. By the end of 2016, the Fed's policy makers forecast rates at 2.75 per cent, while the market has them at 1.50 per cent. By the end of 2017, Fed policy makers expect rates to be 3.75 per cent compared with market forecasts of 2.0 per cent. (VIEW LINK)
Here's a link to a story the Economist ran in 2011 looking at FOMC GDP forecasts out to 2013. Obviously the reality was far lower than expectations http://www.economist.com/blogs/freeexchange/2011/06/feds-forecasts
Here is the FOMC's 'dot chart' for fed funds rate projections at the beginning of 2012. Obviously it's likely to be 0-0.25% at the conclusion of 2014 http://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20120125.pdf
Along with the persistent notion that the Fed will hold off tightening should markets begin to wobble, if you look at the FOMC forecasts over the past few years there is a clear pattern of members grossly overestimating the path for the Fed funds rate.
Is there a chart that illustrates that gross over-estimation