Who's Who in the FOMC 'Dot Plot'

The Fed remains on track for its initial rate increase at the September FOMC meeting. Despite a downgraded growth forecast for 2015, policy makers continue to retain the option of raising rates once or twice in the second half of the year. This was most broadly evident in the rigidity of the 2015 “dot plot,” at least with respect to the voting members. Prior iterations of the dot plot removed rate increases from 2015 but did not materially change the pace of tightening. The latest version held firm to the signal from March regarding a second-half liftoff, although it did show a slightly slower pace of rate increases in 2016.

The Fed’s “dot plot” shows the expected percentage-point level of the federal funds rate at the end of each calendar year. It illustrates the expected cumulative change, while leaving the interim path uncertain. The “dot plot” is anonymous, but Bloomberg Economics has inferred which dots correspond to the various FOMC members based on our analysis and interpretation of recent public comments. This allows us to remove the dots pertaining to non-voting members from the equation, which previously has presented an even more dovish Fed.