The attention of the Fed

This paper proposes a simple measure of the Fed's inattention to incoming information, based on the persistence of disagreement between the Fed and professional forecasters. I document a substantial degree of persistent disagreement over time and across variables, typically exceeding half. At a short horizon, there is also evidence of a significant attention advantage of the Fed over professional forecasters. Both the level of attention and the attention advantage are cyclical and tend to increase during periods of monetary easing, thus highlighting the state dependency of the information channel in monetary policy.