Overview
The Federal Reserve's dot plot is published quarterly with the Summary of Economic Projections after selected FOMC meetings, showing where each of the 19 Fed officials expects the federal funds rate to be at year-end for the next several years. Each dot represents one official's projection. The median dot (middle value) is most closely watched by markets. To read it effectively: (1) Focus on the median for the current and next year โ this drives near-term rate expectations. (2) Compare the new dot plot with the previous one to spot shifts in hawkish/dovish sentiment. (3) Watch the dispersion (spread) of dots โ wide dispersion signals high uncertainty among policymakers. (4) Compare the dot plot median with market-implied rates from Fed funds futures โ divergences often create trading opportunities. The dot plot moves bond yields, equity valuations, and the dollar within minutes of release.