In addition, since developments in employment tend to lag behind economic activity, if the U.S. economy decelerates faster than expected, the unemployment rate could rise by more than expected, following in the wake of such an economic slowdown. In terms of uncertainties surrounding the U.S. economy, I would like to add the risk that financial conditions will also lead to an economic downturn.
Case Study: the increase in the OCR in 2014  The increase in the OCR in the first half of 2014 provides a good case study of our conditional approach to forecasting in a ‘radically uncertain’ world. At the start of 2014 the global economy appeared to be recovering from the 2008/9 global financial crises, with the IMF asking whether the “tide was rising”.