A veteran market researcher is out with a warning — saying the Federal Reserve is relying too heavily on economic surveys skewed by social media to mold their policies.
According to Bianco Research President James Bianco, most economists mistakenly believe that leading indicators are signaling an "A+" economy that can withstand rising interest rates.
"It's more like a B- economy," he told CNBC's "Trading Nation" on Friday. "It's not this screaming home run that everybody thinks it is based on the survey data."
Bianco said social media is creating the bandwagon effect among survey respondents, a psychological phenomenon characterized by people following the herd.
"The advent of social media is allowing us basically to be inundated with financial news or economic news," he said, adding the bulk of the news about the world's largest economy has been largely favorable.
Bianco fears the Fed will make a policy error based on respondents' answers.
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