All Posts Tagged: dot plot

U.S. Outlook: Dissecting the dots

Scott Anderson
Chief Economist

Every newspaper article on the Fed decision this week cited the downward migration of the median dot-plot from three hikes next year to just two hikes.

View of a eagle statue on Federal Reserve building in DCBut just looking at the median forecast gives one a false sense of precision about the future of U.S. interest rates.

For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on Dec. 21.

Key observations:
  • The FOMC members neatly divide into three distinct camps when it comes to interest rate expectations for 2019.
  • The market appears to have come to a far different conclusion than the FOMC about the proper stance of monetary policy and interest rates.
  • It is important to note that markets get things wrong sometimes; they can overreact especially during times of market panic like we seem to be going through right now. But sometimes markets see our economic future before analysts do, or even before the Fed does.

Read my full report.

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U.S. Outlook: Is tighter monetary policy already beginning to bite?

Scott Anderson
Chief Economist
Federal Reserve building (Washington DC) at dusk.

The September FOMC minutes, released Wednesday, revealed an upbeat assessment of current U.S. economic conditions and the outlook.

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Instant Analysis: FOMC statement for March

Scott Anderson
Chief Economist
Facade of the Federal Reserve building in Washington DC on a sunny day.

The FOMC raised the fed funds target rate range another quarter percentage point today to between 1.50% and 1.75% and maintained its median forecast for three quarter-point rate hikes by the end of 2018 and 2019.

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U.S. Outlook: What we expect from the Federal Reserve next week

Scott Anderson
Chief Economist
Graph showing rise in total net worth of households.

Amid much anticipation, we expect the FOMC to vote next Wednesday to raise the Fed funds target rate range another quarter percentage point to between 1.25% and 1.50%.

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Instant Analysis: FOMC announces balance sheet unwind will begin in October

Scott Anderson
Chief Economist
View of a eagle statue on Federal Reserve building in DC

As was widely telegraphed before the meeting, the committee decided to go ahead with the balance sheet normalization program in October.

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