“One should not look to the dot-plot, so to speak, as the primary way in which the committee wants to or is speaking about policies to the public at large,” Yellen said.
The Fed provides information on interest rate forecasts for FOMC members through dot-plot. You get an idea of the range of forecasts, but as members change there will be a change in the range of forecasts. This is not because interest rate views change but because the composition of FOMC members change. Warning, do not look at the dot-plot. So why do we have it and what does it tells us? Is there a correct way to view this graph? Finally, if a warning is necessary, is it really providing forward guidance?
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