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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
FED
The first question about the Dot Plot is how many dots we get: we assume a full 18, though some analysts have noted the potential non-participation of Gov Quarles and/or VC Clarida given their imminent departures. (We assume the interim Boston and Dallas Fed presidents submit too.)
- For the 2022 dots: consensus is heavily for 2 implied hikes (0.625%) as the median. In September's dots, we had a split decision between 3 dots for 2 hikes, 6 for 1 hike, and 9 for unchanged, which led to a median of 0.25%, a split between zero hikes (0.125%) and one hike (0.375%).
- On the hawkish end, StL's Bullard said last month he still sees 2 hikes in 2022, so while of course minds could have changed since then, it's unclear how many participants are eager to pencil in 3 - perhaps two. Conversely, on the dovish end, probably one or two of the 9 "unchanged" will remain there. The bulk will be split in the one or two dot range most likely.
- Apart from looking at the median itself, our “Instant Answers” will be looking for how many dots are above 0.625% and above 0.875% (ie 2 / 3 hikes).
- A small number of upside (more than 2 hike) outliers would in itself probably be a slightly dovish development vs market pricing and would help Powell reinforce the idea that the decision to taper is not a signal that the FOMC leadership is rushing to tighten.
September 2021 Dot Plot of Fed FundsSource: Federal Reserve
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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