Understanding the Federal Reserve's Quarterly "Dot Plot"
The "dot plot" shows projections for the federal funds rate … a key short-term interest rate that can affect savings yields and consumer loan rates.
Each dot represents the view of a Fed policy maker for the rate’s target range at the end of each year shown.
Markets generally focus on the median "dot" or projection.
At its March 2022 meeting, the Fed raised the fed funds rate by 0.25% to a range of 0.25% to 0.50%.
[Row of dots representing 1.875% in 2022 circled] The median dot projects a year-end rate of 1.875%, suggesting there may be 6 more hikes of 0.25% in 2022.
[Dots representing 2.75% in 2023 circled] In 2023, there could be 3 or 4 additional rate increases of 0.25%.