Dot Plot
What is the Fed dot plot? The quarterly chart where each Fed official marks where they expect interest rates to be, the market's clearest map of the intended rate path.
The dot plot is the chart the Federal Reserve publishes four times a year in which every FOMC policymaker marks, with one anonymous dot per year, where they think interest rates should be at the end of the next few years and in the longer run. It is the closest thing markets get to a printed map of the Fed's intended rate path, which makes it one of the heaviest recurring releases for the dollar.
How it works
The dots arrive with the rate decision at the March, June, September and December meetings. Markets compress the whole chart into a few readings: the median dot per year (the committee's central expectation), the spread (how much the members disagree), and above all the change versus the previous quarter. A median that shifts up half a point says the committee now intends more tightening: a hawkish surprise even if today's rate decision was exactly as expected. The longer-run dot doubles as the committee's estimate of the neutral rate, and the highest year-end median usually reads as the intended terminal rate.
A worked example
Suppose markets price three rate cuts for next year, and the December dot plot's new median shows only one. The decision itself, no change in rates, was fully priced and moves nothing. The dots move everything: expected cuts get priced out, yields rise, and the dollar rallies hard in the minutes after the release. The opposite happens when the dots undershoot expectations. On dot plot days, the surprise almost never sits in the decision; it sits in the median dot against what the market had priced.
Common mistakes
The first mistake is reading the dots as a forecast that must come true: the Fed's own dots have historically missed badly at turning points, and the committee feels no obligation to follow them. Trade the change in the dots, not their accuracy. The second is ignoring the distribution: a median held in place by one swing vote is fragile information, while a tight cluster is conviction. The full mechanics, history and trading patterns are covered in our complete guide to the dot plot.
See it in the data
Dot plot releases land with the Fed decision four times a year: track the next one on the Fed decision page, and see how the projected path compares across currencies in the interest rate differential table.