FOMC interest rate projections (dot plot) in United States

At its quarterly meetings in March, June, September and December, the FOMC (the Federal Reserve's rate-setting committee) publishes the Summary of Economic Projections (SEP). Its most closely watched part is the 'dot plot': each participant's projection for the appropriate federal funds rate at the end of each year and over the longer run. The median sums up the rate path the Committee expects.

From Table 1 of the SEP, the 'Federal funds rate' row (appropriate policy path), 'Median' column, is taken. The median is recorded for the end of the current year, year +1, year +2 and the longer run, as a percentage (midpoint of the target range).

It is a first-order piece of forward guidance. An upward revision to the medians (a more hawkish dot plot) tends to lift the dollar and yields; a downward revision (more dovish) weighs on them. Markets compare the new median with that of the previous SEP.

These are conditional projections, not commitments: they shift from one meeting to the next as activity and inflation evolve. The median masks the dispersion across participants, and the 'current year' reference rolls over each December.