Bloomberg (05/20/12) Caroline Salas Gage

The median of 55 estimates compiled this month by Blue Chip Economic Indicators for 2012 is economic growth of 2.3%. All but 16 of the predictions were below the bottom of the U.S. Federal Reserve’s projection of 2.4% to 2.9% growth. The disconnect between the central bank’s optimistic forecast for expansion and its more bearish expectations for the labor market and inflation have made it difficult to predict the course of monetary policy, according to some economists, who admit they may have underestimated central bankers’ emphasis on their goal of full employment. The Fed last month reiterated its plan to keep borrowing costs “exceptionally low” through at least late 2014, in part to bring down “elevated” joblessness.