The stir for the market has been the so-called dot-plot, which
captures policy rate projections by Fed members. The latest
dot-plot showed an upward thrust in the median projection for the
fed funds rate in 2023 to 5.60% from 5.10%. In other words, the
median views calls for at least two more rate hikes in 2023. That
runs counter to the market's thinking that there would likely be
only one more rate hike (most likely at the July meeting). In turn,
the median policy rate projection for 2024 was revised to 4.60%
from 4.30% and the median projection for 2025 was revised to 3.40%
from 3.10%, which supports a "higher for longer" policy rate
outlook.
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The stir for the market
Posted by EdZ on 14th of Jun 2023 at 02:24 pm
The stir for the market has been the so-called dot-plot, which captures policy rate projections by Fed members. The latest dot-plot showed an upward thrust in the median projection for the fed funds rate in 2023 to 5.60% from 5.10%. In other words, the median views calls for at least two more rate hikes in 2023. That runs counter to the market's thinking that there would likely be only one more rate hike (most likely at the July meeting). In turn, the median policy rate projection for 2024 was revised to 4.60% from 4.30% and the median projection for 2025 was revised to 3.40% from 3.10%, which supports a "higher for longer" policy rate outlook.