Download the Schwab app from iTunes®Close

Understanding the Federal Reserve’s Dot Plot

Click to show the transcript

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.

[Row of dots representing the median for 2021, 2022, 2023 and longer run circled]

Markets generally focus on the median “dot” or projection.

[Row of dots representing 0%-0.25% in 2021 circled] The Fed funds rate ended 2021 in the 0% to 0.25% range.

[Dots representing 0.75% - 1.0% in 2022 circled] The median dot projects three 0.25% rate hikes in 2022 …

[Dots representing 1.5% - 1.75% in 2023 circled] … and three more increases in 2023.

What you can do next

• Follow the Schwab Center for Financial Research (@SchwabResearch) on Twitter.

• Make sure your portfolio is diversified and aligned with your risk tolerance and investment timeframe. Want to talk about your portfolio? Call a Schwab Fixed Income Specialist at 877-566-7982, visit a branch or find a consultant.

• Explore Schwab’s views on additional fixed income topics in Bond Insights.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. 

Data contained herein from third party providers is obtained from what are considered reliable sources.

However, its accuracy, completeness or reliability cannot be guaranteed.

©2021 Charles Schwab & Co., Inc. (“Schwab”). All rights reserved. Member SIPC


Thumbs up / down votes are submitted voluntarily by readers and are not meant to suggest the future performance or suitability of any account type, product or service for any particular reader and may not be representative of the experience of other readers. When displayed, thumbs up / down vote counts represent whether people found the content helpful or not helpful and are not intended as a testimonial. Any written feedback or comments collected on this page will not be published. Charles Schwab & Co., Inc. may in its sole discretion re-set the vote count to zero, remove votes appearing to be generated by robots or scripts, or remove the modules used to collect feedback and votes.