Dot Plot

Dot plot means a chart showing where Federal Reserve officials think interest rates may be in the future. In simple terms, each dot shows one Fed official’s rate forecast. The dot plot is important because investors use it to understand how Fed officials are thinking about future rate cuts, rate hikes, or rate holds. It can move markets if it suggests a different rate path than investors expected. For example, if the dot plot shows fewer expected rate cuts next year, bond yields may rise and stocks may face pressure. The dot plot is not a promise. It is a set of forecasts that can change when inflation, jobs, growth, or financial conditions change.