Key facts
- The Federal Reserve's dot plot displays individual policymakers' projections for the federal funds rate.
- The chart reveals the median projection for interest rates over the next few years and in the longer run.
- It also shows the range of individual forecasts, indicating the degree of consensus or divergence among Fed members.
The Federal Reserve's 'dot plot' is a key tool for understanding the central bank's future interest rate intentions. This chart, released quarterly, shows individual Federal Open Market Committee (FOMC) members' projections for the federal funds rate over the coming years and in the longer run. Each dot represents one policymaker's forecast, and the median projection indicates the committee's expected path for rates. The spread of the dots reveals the degree of consensus or divergence among Fed members on the future direction of monetary policy. Understanding these projections can help investors and market participants anticipate potential shifts in interest rates and their impact on the economy.