Neal Katz, Executive Vice President of Equitable Bank spoke to the Club recently about his views on economic forecasts and how difficult it is for people, businesses, institutions, and governmental units to accurately forecast the economy.  He spoke of how predicting the direction of the economy is not an exact science and how the data can be misleading, confusing, and sometimes just wrong.  His role at the bank includes interest rate planning, which is crucial to the ability of small banks to make any money on the spread, particularly since interest rates are now so historically low.  He offered many examples of major economic predictions that were wrong over the years and then offered his thoughts on why this has been the case.  He feels that the economy is huge and ever changing and it is very difficult to get the correct data.  Economic data from the government is often not so good, and it is so difficult to predict if you don’t know your exact current position.

 

Neal advised members to follow common sense when dealing with predictions and forecasts for business and personal reasons.  Don’t believe in absolutes, look for balance, know your investment, don’t bet the farm, have diversity in investments, and don’t give up if they go wrong. 

 

Club members were very interested in Neal’s comments and were happy to hear his comments on forecasting the economy, especially advice on navigating these economic forecasts.