Fed Chair Powell signals possible tweaks to 'dot plot' rate-path forecasts

Federal Reserve Chair Jerome Powell on Friday signaled potential changes for the Fed's closely watched «dot plot» interest-rate projections as part of a broad policy framework review underway at the U.S. central bank and expected to wrap up by the end of summer.

«On the communications...particularly our post-meeting communications, we're going to take a close look at the SEP and also compare ourselves to what other central banks around the world do,» Powell said at a research conference in New York, referring to the Fed's summary of economic projections.

That is the Fed's quarterly report on what each of its 19 policymakers expect for economic growth, the unemployment rate, inflation, and the Fed's own policy rate over the next several years.

Individual policy-rate projections are plotted as dots on page 4 of the report, published at the end of the Fed's rate setting meetings each March, June, September and December. Economists and financial markets use those dots as a guide to what the Fed sees as most likely to do on rates.

Supporters of the dot plot say it can make monetary policy more effective, noting that in the wake of the global financial crisis the Fed's dot plot underscored U.S. central bankers' expectation they would be keeping rates at zero for much longer than markets might have otherwise expected.

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