Kevin Warsh is about to chair his first Federal Open Market Committee meeting. And he’s already breaking with tradition before it starts.
CNBC reports that Warsh will not include his personal interest rate projection, known as the “dot,” in the upcoming Summary of Economic Projections. For anyone who’s spent the last decade obsessing over those tiny circles on a chart, this is a big deal.
What the dot plot is and why it matters
The dot plot has been the Fed’s signature communication tool since 2012. It’s a chart showing where each FOMC member thinks interest rates should be at various points in the future, with each projection represented as a single dot.
Warsh has been a vocal critic of the dot plot for years, arguing that it creates a kind of policy straitjacket. His core complaint is straightforward. When the Fed publishes rate projections, markets treat them as near-commitments. And when economic conditions shift, those outdated forecasts can box policymakers into corners they’d rather not be in.
