The Fed Dot Plot Explained: How to Read the Most-Watched Chart in Macro
Macro Guide, 2026
By Ken Chigbo, Founder, KenMacro, UK macro desk.
Updated 2026-05-31
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The short answer
The Fed dot plot is the visual centrepiece of the Federal Reserve’s quarterly Summary of Economic Projections, the SEP, published alongside the FOMC rate decision in March, June, September and December. It plots each of the 19 Federal Reserve officials’ individual projections for where the federal funds rate should sit at the end of the current year, the next two years, and the longer run, as a single dot on a chart. The most-watched line is the median dot for each future year, which the market reads as the committee’s central rate path. A hawkish shift, the median dot moving up versus the previous SEP, tells the market the committee now sees rates higher for longer than it did three months ago, which typically lifts the dollar, lifts US yields, and pressures gold. A dovish shift does the mirror. The crucial point for traders is that the dot plot is not a forecast and not a commitment; it is a snapshot of where each official thinks rates should go given current data, and the median can and does shift meaningfully from one quarterly release to the next.
What the SEP and the dot plot actually are
The Federal Reserve publishes the Summary of Economic Projections four times a year, in March, June, September and December, alongside the FOMC rate decision. The SEP is the committee’s collected forecasts for growth, unemployment, inflation, and most importantly the federal funds rate, contributed by all 19 FOMC participants, the seven members of the Board of Governors plus the 12 Federal Reserve Bank presidents, including those who do not vote in any given year. The dot plot is the visual centrepiece. Each participant marks where they think the federal funds rate should be at the end of the current year, the end of each of the next two calendar years, and over the longer run, as a single dot on a chart. The chart is published anonymously, so you cannot tell which dot belongs to which official, but the cluster reveals the committee’s distribution of views and the median for each year tells you the central path.
How to read the dots, in order of importance
Read the dots in three layers. The first and most market-moving is the median dot for the next twelve months, the year-end of the current and next calendar year, because that is the part of the curve traders most actively price into rate futures and the dollar. The second is the change versus the previous SEP: a single dot moving up or down on one official is noise; a shift in the median across the committee is signal. A median dot moving up versus the previous release is a hawkish shift, even if the actual decision on the day was a hold. The third is the dispersion, the spread between the highest and lowest dots, because a tightly clustered committee tells you the path is firm while a widely dispersed one tells you the committee is divided and the median could move quickly. The longer-run dot, the so-called neutral or terminal rate, matters less for immediate trading but anchors the wider rate picture. For the methodology in plain English see the Fed’s SEP explainer.
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Why the dot plot moves markets so hard
Because the rest of the rate path that drives the dollar and bond yields is precisely what the SEP is asking each Fed official to estimate. The market enters the meeting with a curve priced into rate futures based on consensus expectations, and the SEP gives you the committee’s own central case in a single number for each year. When the median dot lands above the priced curve, that is a hawkish surprise, and traders re-mark the curve upward in seconds: the dollar lifts, US 2-year and 10-year yields rise, and gold pressures. When it lands below, the move is the mirror. The press conference that follows at 19:30 UK time on FOMC day adds a second leg of volatility as the Chair walks through how the projections were arrived at and what conditions would change them. The combination of decision, SEP and press conference makes the four SEP-quarter FOMCs the biggest events on the calendar after non-farm payrolls.
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How the desk trades dot-plot day
Three rules. First, mark what the rate-futures curve and consensus already price for the year-end fed funds rate before the release, so the surprise versus that bar is instantly readable on the 19:00 UK statement and SEP drop. Second, read the median dot first, then the change versus the previous SEP, then the dispersion: those three layers together give you the real read, not the absolute number. Third, treat the 19:30 UK press conference as a separate event with its own setup, because the Chair often clarifies or softens the SEP message and the dollar can fully reverse between 19:00 and 20:30. The cleanest expressions are EUR/USD or DXY for the dollar leg, US 2-year yields for the rate-path leg, and gold for the haven and real-yield leg, and when all three agree on the direction the read is clean. Size for the wider FOMC-day range, do not pre-position into the meeting unless the curve is materially mispriced, and accept that the cleanest trade often appears after both stages are in.
The desk’s checklist
- Know when the SEP and dot plot land. Four times a year, in March, June, September and December, alongside the FOMC rate decision at 19:00 UK. The other four meetings have only the statement and press conference, no SEP.
- Mark the priced curve before 19:00 UK. Check rate-futures and consensus for the year-end fed funds rate. The market trades the surprise versus that bar, not the absolute dot.
- Read the median first, then the change, then the dispersion. The median dot for the next year is the headline. The shift versus the previous SEP tells you the direction. The dispersion tells you how firm the central path is.
- Treat the press conference as a separate event. The Chair’s 19:30 UK press conference often clarifies or softens the SEP message. The dollar can fully reverse between 19:00 and 20:30. Reserve some size for it.
- Confirm direction across dollar, 2-year yields, gold. Cleanest read needs the dollar, US 2-year yields and gold all agreeing on the direction. When one disagrees, distrust the move and wait.
Frequently asked
What is the Fed dot plot?
The Fed dot plot is the chart at the heart of the Federal Reserve’s quarterly Summary of Economic Projections. It shows each of the 19 FOMC participants’ individual projections for where the federal funds rate should sit at the end of the current year, the next two years and the longer run, as a single dot on a chart, with the median dot for each year forming the committee’s central rate path.
When is the dot plot released?
Four times a year, in March, June, September and December, alongside the FOMC rate decision and statement at 14:00 New York time, which is 19:00 in London. The other four FOMC meetings have only the statement and press conference, with no fresh SEP.
What is the median dot?
The median dot is the middle of all 19 participants’ projections for the federal funds rate in a given year, the line traders watch most closely because it represents the committee’s central rate path. A median dot moving up versus the previous quarterly SEP is a hawkish shift; moving down is a dovish shift.
Why does the dot plot move the dollar?
Because it tells the market the Fed’s own central case for where rates will sit over the next two years, which is the single biggest driver of the dollar through interest-rate differentials. When the median dot lands above the rate-futures curve already priced in, that is a hawkish surprise, and the dollar lifts in seconds as traders re-mark the curve upward. When it lands below, the dollar weakens.
Is the Fed dot plot a forecast?
Not in a strict sense. It is a snapshot of where each FOMC official thinks rates should go given current data and their own framework, not a commitment from the committee. Dots can and do shift meaningfully from one quarterly SEP to the next as data evolves, and the Chair routinely reminds the press that the dots are projections, not policy commitments. Markets still trade them hard because they are the best read of the committee’s central case at any moment.
FOMC days with the SEP and dot plot deliver some of the sharpest dollar moves on the calendar. To trade them cleanly you need tight pricing on EUR/USD, gold and the indices. The desk’s broker stack:
Which broker for this
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Sources and further reading
Educational analysis only, not financial advice. KenMacro has commercial partnerships with some firms referenced and may earn a commission if you open an account, at no cost to you. Manage risk against your own circumstances.
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