Federal Reserve economists have highlighted the potential of macroeconomic forecasting markets as effective tools for policymakers, according to a working paper. These markets offer real-time, market-based measures of inflation and interest rate expectations, often surpassing traditional forecasts. The paper suggests that forecasting markets can enhance research and policy by providing transparent, continuously updated insights into monetary policy transmission and macroeconomic uncertainty.
Meanwhile, regulatory scrutiny of prediction markets is intensifying. The Ninth Circuit Court of Appeals has allowed Nevada to continue its civil enforcement against federally regulated prediction markets, rejecting a request to suspend the action. This decision fuels the ongoing debate over whether prediction markets should be governed by federal goods law or state gambling regulations. The ruling is provisional, with the potential for Supreme Court review pending a full appeal in the Ninth Circuit.
Federal Reserve Economists Endorse Forecast Markets Amid Regulatory Scrutiny
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