There are 3 things you need to know about Economist Predictions:
1. Their short term predictions are generally lousy. Witness the most recent Fed Rate cuts. Majority of the economists expect 50 basis point cut, some expect 25 basis point cut, even when futures markets were pricing in nearly 100% probability that the cut is going to be at least 75 bp. And of course, the Feds lowered interest rates so large that it clearly exceeded all the economist predictions! *grin*
2. Their long term predictions are better.
3. In the long run, we are all dead. *grin* Ironically, this last point is probably the least contentious point amongst the 3, and is actually uttered by the famous economist of all time, John Maynard Keynes.
Anyway, humour aside ... I want to show you this chart, which is based on a Bloomberg survey of 50 economists.
The current Fed Funds rate is 25 bp, and economists are expecting this to stay the same until Q3/09, when they think it will then be raised a little, and then more in 2010. They also expect the bond yields to steadily increase over the same period.
My own opinion is that in the long run, they are probably right. *grin*. In the immediate term, if you bet on 1., then, it might not be a bad idea, to bet against the economists on the bond yield, although bear in mind, since the economists got it wrong the last time, randomness alone will probably mean that they'll be right this time. *grin*