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.
[Images representing car loans, credit card loans and savings flash on the screen]
Each dot represents the view of a Fed policy maker for the rate’s target range at the end of each year shown.
[Scatter plot with dots for the years 2024-2027 and the “Longer Run” is shown]
Markets generally focus on the median "dot" or projection.
[Median row of dots for each year shown in scatter plot is circled]
At its September meeting, the Fed lowered the fed funds rate by 0.505 to a range of 4.75% to 5.0%.
The median projection for the fed funds rate at year-end 2024 is 4.375%, implying another 0.50% of rate cuts this year.
[Row of dots representing 4.375% in 2024 is circled]
The median projection for the fed funds rate by year-end 2025 is 3.375%, though there is a wide range of estimates from less than 3% to higher than 4%.
[Row of dots representing 3.375% in 2025 is circled]
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