Scoring a decade of Wall Street and political-risk forecasts: being wrong wasn’t their biggest problem
Source: Fortune ·
I graded 135 year-ahead outlooks over a decade. Just 16% named the event that went on to move markets.
From the source
In about a month, Wall Street will publish its outlooks for 2027. Before you move your money, consider what became of last year’s forecasts. The consensus was that the Fed would cut rates and borrowing would get cheaper. The cuts never came, and borrowing got more expensive. If you waited to buy a house on that forecast, the same median-priced home now costs $314 more a month. It is easy to dismiss that as an off year when no one keeps score. So I graded them: 135 forecasts published over the past decade by fifteen institutions, Morgan Stanley, Citi, Goldman Sachs, Teneo and the IMF among them, against a public rubric, with a second researcher scoring every one independently. Just 16% named the event that went on to move markets. Only three calls said how it would reach a portfolio, the one thing an investor needs to act on. Even the one number banks routinely commit to, the year-end S&P 500 target, fared worse than a coin flip: they expected gains in 2022, when stocks fell 19%, and…