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ChartBrief #4 Fed Dot Plot

A quick update on the equal weighted average Fed "Dot Plot" dot following the September FOMC announcement. This graph charts the average dot (i.e. an equal weighted average of all the dots on the chart) of the Fed's own expectations of where it sees the Fed Funds Rate through time. The September 2016 projections were revised down by about 1 hike across the time frames and still imply a hike in December (albeit it could only be a 12.5bp hike!)

Specifically the average dot came down by -17bps in 2016, -32bps in 2017, -35bps in 2018, and -23bps for the longer run expectations of the Fed funds target rate. Perhaps the more interesting number in this Fed statement was that 3 FOMC members dissented this meeting - preferring to get on with hiking interest rates. So there is definitely a movement within the Fed looking to get on with the next rate hike, but it still seems likely that the next hike will come in December given the impact of election uncertainty on the data, and still mixed signals on the US economy.

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