Risk Managed Strategy Funds


Schwab: Understanding the Federal Reserve’s Dot Plot

September 29, 2021

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.

[Row of dots representing 0%-0.25% in 2021 circled] The median projection is for the Fed funds rate to remain at the current range of 0% – 0.25% through 2021.

[Dots representing 0.385 and 0.635%  in 2022 circled] Nine of the 18 members project rates to rise in 2022.

[Dots representing 0.875%, 1.125%, and 1.625% in 2023 circled] The majority of members project at least three 0.25% rate hies by the end of 2023.

Source: https://www.schwab.com/resource-center/insights/content/understanding-feds-dot-plot