Wall Street against the Fed's why their predictions are so different?

Major US
banks and the central bank did not see eye to eye
about the future of the US economy. Just
Wall Street assesses the situation more
optimistic than Fed.

For example, in the project
Atlanta Fed economy should
to grow by 2% in the second quarter. But
economist at Barclays Dzhessi Hurvits
predicts growth of 3%, while Bank of America Merrill
Lynch - 2.5%. Estimates of other large banks
too are somewhere close to these
figures. But why get so
gap?

Wall Street economists say that the key difference is
that the Fed estimates
economic growth based on past performance (in fact), and the assessment
major banks are based on projections.
"There are quite a large gap between the
Atlanta Fed estimates and most
Wall Street economists", - He speaks
Ethan Harris, head of department
the global economy Bank of America Merrill
Lynch. - Approach the Fed - extrapolation
the latest trends for the next
quarter".

Wall Street believes that
Americans spent more in the spring and
year period, which will help to stimulate
economy in the second quarter. "we
We see the opposite in terms of rebound in consumer spending".
- Hurvits said.

But past results
a bit confusing to analysts of the central bank.
Some banks sometimes better to guess the future
rates than the Fed. For example, Bank of
America in its quarterly estimates of GDP
US three times out of four was closer to
official figures. But the Fed Tracker proved to
much closer to the real figure,
than the Bank of America, in the first three
months of the year.

economists continue
"Compete" in predicting a
Fed and with each other. Harris of Bank of America
meanwhile, believes that the Fed method
It is a good model, but not the most
best.