If Gretzky Were a Central Banker

Nice analogy (click here for the full story):

Hockey great Wayne Gretzky was once asked about his success on the ice. He responded by saying, “I skate to where the puck is going to be, not to where it has been.” He didn’t chase the puck. Instead, Gretzky wanted his hockey stick to be where the puck would be going next. He scored many goals with that strategy, and I believe monetary policymakers can better achieve their goals, too, if they follow the Gretzky strategy.

Good monetary policymakers, like good hockey players, must be forward-looking in their actions. Setting policy that is appropriate for where the economy is today, or has recently been, is not likely to deliver the kind of economic outcomes we desire. … Gretzky, like all great hockey players, excelled, in part, because of his ability to anticipate. That does not mean he always anticipated accurately. Sometimes his forecast turned out to be wrong and the puck went in another direction. But that does not mean that his strategy was wrong, only that his execution needed improvement. The more you understand the game or the economy, the better your forecasts will be. Monetary policymakers similarly must be forward-looking despite the difficulties, uncertainties, and challenges that entails.