Dot Plot (Fed Projections)

A Dot Plot is a chart where each Federal Reserve official places a dot showing their prediction for future interest rates. Think of it as a visual forecast—each dot represents one person's guess about where rates will be in a year or two. You'll see this chart whenever the Fed meets to discuss monetary policy, usually four times a year. It matters because investors watch these projections closely: if dots cluster higher, it signals the Fed plans to raise rates, which typically hurts stock prices. If dots stay low, it suggests rates will remain steady. For example, if most dots point to a 5% interest rate by next year but the market expected 3%, stocks might sell off because borrowing becomes more expensive for companies.