🔔 The comforting myth of certainty

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Who likes the feeling of being uncertain?

Avoiding uncertainty is hard-wired into every single one of us.

People run from uncertainty, because that's what all of our ancestors did...

Anyone strutting around confidently ignoring that rustle in the bushes ended up eaten or murdered.

Those genes didn't get passed on.

The ones who ran away from that uncertainty survived and passed those instincts on to the next generation...

Sciency evolution types call it survival optimisation...

Nowadays, we don't face those same survival risks yet that tendency to avoid uncertainty persists.

Which makes it even stranger that people build careers out of forecasting a highly uncertain future...

Now, I've had a bit of a pop at inflation and economists this week so I thought we could use them to illustrate how that game works 👇

That's settled then: 2.8% is THE NUMBER, the threshold

Digging into the details, the massive range of responses within this survey led some to ask if it was bad communication from the Fed or economists not understanding...

There's a lot more here so let's break it down...

First, a return to those survival instincts.

There is very little upside to an economist making outrageous predictions.

Safety in numbers: If you're wrong alongside everyone else, you keep your job...

Which is probably why precisely 68% of responses are within the 3-12 month bands.

Bell curve wins again...

Even though many economists noted the huge amounts of uncertainty in their comments, they have to give an answer.

Those comments don't make it into the survey data though...

This is the problem with surveys.

It's all binary numbers and boxes to tick.

Which is presented as RESULTS.

Which makes the headline sounds certain... 👀

Reuters poll: Fed's core PCE inflation concern threshold is 2.8% - economists

'Economists' on the end is a nice touch: it really adds some authority to the number, and isn't that the name of the game?

The job of the media is to deliver certainty.

Well-known media personalities: Are they the most-informed, or the ones who speak with the most conviction?

In the media, there's no room for fence-sitting or considering uncertainty and probability, especially in the headlines.

Accuracy is sacrificed for certainty, all in the name of clicks.

In this case, James Knightley (chief international economist at ING) rode to the rescue of any confused readers who dared to venture beyond the headline...

What kind of context might that be?

• Context

• If

• Consider

The words of someone used to dealing with uncertainty.

It's a perfect illustration of why it's so important to read beyond the headline and make your own interpretation of the information presented...

Draw your own conclusions.

The most interesting nugget in that article...

Soooo, wouldn't a more accurate headline be

Economists guessed with a low degree of certainty that 2.8% core inflation would make Fed uncomfortable while only 8% of them guessed that inflation will reach that level

Who's going to click on that?