Read on Investopedia: How Useful Are The Fed’s Upcoming Interest Rate Predictions?
Investopedia, June 7, 2024
- A Brookings survey found more than 40% of market participants thought the Fed should scrap or change the dot plot.
- Cleveland Fed President Loretta Mester wanted the dots connected to each policymaker’s economic forecasts. Chicago Fed President Austan Goolsbee said that without those links, the dots lack economic context.
- Fed Vice Chair Philip Jefferson defended the tool as a point-in-time snapshot of 19 forecasts, not a commitment.
- Apollo’s Torsten Sløk found that Fed and market rate forecasts are almost always wrong in the same direction, suggesting markets take their cue from the dots.
- The piece ran ahead of the Fed’s June 12 meeting, when Wells Fargo expected the dots to show one or two cuts, down from three in March.
Investopedia: How Useful Are The Fed’s Upcoming Interest Rate Predictions?