Economics · The Fed and interest rates
The Fed dot plot: how to read the FOMC’s rate projections
What each dot in the Fed’s dot plot means, how the median and central tendency are built, what the September 2026 projections showed, and why dots are not promises.
On this page
The dot plot is a chart in the Federal Reserve's quarterly Summary of Economic Projections (SEP). Each dot is one FOMC participant's view of where the federal funds rate should be at the end of this year, each of the next few years and over the longer run. Put together, the dots show how the people who set US interest rates think policy ought to evolve, and how much they disagree.
Markets watch it closely because it is the closest thing the Fed publishes to a rate path. It is also one of the most misread charts in finance. The dots are individual opinions, they include officials who do not vote, they are conditional on each person's own forecast, and they change every quarter. This guide explains how to read one dot by dot, builds the median and central tendency from an illustrative example, and then reads the real September 2026 projections.
What the dot plot shows
The SEP asks every participant (the seven Board governors and the 12 Reserve Bank presidents, when all seats are filled) for projections of real GDP growth, the unemployment rate, PCE inflation, core PCE inflation and the appropriate path of the federal funds rate. "Appropriate" means the policy that participant thinks would best achieve the Fed's goals given his or her own outlook, not what they expect the committee to do.
The Fed's footnote defines each rate projection as the midpoint of the projected appropriate target range, or the target level, at the end of the calendar year or over the longer run. Since the FOMC sets 25 bp ranges, the possible midpoints are spaced 1/4 point apart: 3.625% for a 3.50%–3.75% range, 3.875% for 3.75%–4.00%, 4.125% for 4.00%–4.25%, and so on. The chart rounds each projection to the nearest 1/8 point.
The longer-run column is each participant's estimate of where the policy rate would settle once the economy is at full employment with 2% inflation and no shocks are pending. It is a rough estimate of the neutral nominal rate, and it is the one column not tied to a date.
Anatomy of a dot plot
The figure is invented for teaching; the real chart looks similar but uses the actual calendar years. Read it in four steps.
1. Find the current midpoint. Suppose the range today is 3.50% to 3.75%, a midpoint of 3.625%.
2. Read the median for this year. In the illustration, 10 of 19 participants put the year-end rate at 3.875%, five at 3.625% and four at 4.125%. With 19 dots, the median is the 10th from the bottom, which is 3.875%. One step above today's 3.625% means the median participant sees one 25 bp increase as appropriate before year-end.
3. Count the spread. Five participants think no change is appropriate; four think two increases are. Disagreement of a quarter point on either side is modest. In the "Year 3" column, the dots spread from 2.625% to 3.875%, a range of 1.25 points; far-ahead dots usually disagree more.
4. Read the slope. The medians fall from 3.875% this year to 3.375% next year, 3.125% in year 3 and 3.0% in the longer run. The median participant sees a hike now and cuts later, ending near the longer-run estimate.
The real September 2026 projections
The September 15–16, 2026 meeting raised the target range to 3.75%–4.00%, a midpoint of 3.875%. Its SEP, released at 2:00 p.m. EDT on September 16, reported these fed funds projections from 18 participants (17 for 2028 and 2029):
| Year-end | Median, Sep 2026 | Median, Jun 2026 | Central tendency, Sep 2026 | Range, Sep 2026 |
|---|---|---|---|---|
| 2026 | 4.1% | 3.8% | 4.1%–4.4% | 3.9%–4.4% |
| 2027 | 4.1% | 3.6% | 3.6%–4.4% | 3.1%–4.4% |
| 2028 | 3.9% | 3.4% | 3.1%–4.1% | 3.1%–4.1% |
| 2029 | 3.6% | — | 3.1%–3.6% | 2.9%–3.9% |
| Longer run | 3.2% | 3.1% | 3.0%–3.6% | 2.9%–3.9% |
How to read it:
- This year. Twelve of the 18 participants projected a 2026 midpoint of 4.125%, one 25 bp step above the new 3.875%. With one meeting left after October (December 8–9), the median participant saw one more increase as appropriate in 2026. No participant projected a cut: the lowest dot, 3.875%, meant no further change.
- The shift since June. The median for end-2026 rose from 3.8% to 4.1% and for end-2027 from 3.6% to 4.1%. Between June and September the median participant's appropriate path moved up by about a quarter point for this year and half a point for next year.
- Longer run. The median longer-run rate edged up from 3.1% to 3.2%.
What happened next is a reminder of the gap between dots and decisions. At the October 27–28 meeting the committee held the range at 3.75% to 4.00% by a vote of 10 to 2; the two dissenters preferred an increase. The December meeting, with fresh dots, had not taken place at the time of writing.
Why markets react to the dots
Short-term Treasury yields and fed funds futures price the expected path of policy. When the median dot moves above what markets had priced, 2-year yields tend to rise and the dollar strengthens; when it moves below, the reverse. The reaction depends on the surprise, not on the level, and the press conference can reinforce or soften it within minutes. How Fed decisions move markets: expectations, surprises and yields shows the 2-year yield leading the policy rate, and How interest rates affect stocks: discount rates and equity duration explains why stock valuations care.
Pitfalls and limitations
- Dots are not votes or promises. Each is a personal judgment conditional on that participant's forecast. If the economy surprises, the dots move.
- Non-voters count equally. All participants contribute dots; only 12 vote in any year. The median dot can differ from the median voter.
- Anonymity. You cannot tell which dot belongs to the Chair. Speeches help, but the chart does not say.
- Changing cast. Participants retire, seats sit vacant and rotation changes who votes. A shift in the median can come from new people rather than changed minds.
- Far-ahead dots are weak forecasts. The further out the column, the wider the spread and the more the dots reflect each person's models rather than information.
- Rounding. The published medians are rounded to one decimal (4.125% shows as 4.1%), so compute implied moves from the midpoints, not the rounded figures.
The dot plot and other guides to the rate path
| Source | Who produces it | How often | What it measures |
|---|---|---|---|
| Dot plot (SEP) | All FOMC participants | 4 times a year | Each person's appropriate year-end rate |
| FOMC statement | The voting committee | 8 times a year | The decision and guidance |
| Minutes | Fed staff summary of the meeting | 3 weeks after each meeting | The debate and risks |
| Fed funds futures | Market traders | Continuously | Market-implied expected average rate |
| 2-year Treasury yield | Bond market | Continuously | Expected policy path plus a term premium |
| The Taylor rule: formula, worked example and Fed policy since 1990 | Formula | Whenever data update | A benchmark from inflation and the output gap |
How Finabase does it
Finabase does not reproduce the Summary of Economic Projections, and it does not show fed funds futures or market-implied rate paths. The dot-plot figure on this page is an illustration drawn by Finabase Research, not real Fed data; the September 2026 numbers in the table come from the Fed's own release. To watch the market's reaction to new dots, use the 2-year Treasury yield and the full Treasury yields table in the app, and Fed news on Discover for coverage of each release.
Frequently asked questions
How often is the dot plot released?
Four times a year, in the Summary of Economic Projections published with the March, June, September and December FOMC statements at 2:00 p.m. Eastern. In 2026 the projection meetings were March 17–18, June 16–17, September 15–16 and December 8–9.
What does one dot represent?
One FOMC participant's view of the appropriate midpoint of the fed funds target range, or the target level, at the end of a given year or over the longer run, rounded to the nearest 1/8 percentage point.
Is the dot plot a forecast of Fed decisions?
No. Each dot is a participant's judgment of appropriate policy given his or her own outlook. The committee's actual decisions depend on the data and on the voters at each meeting, and they often differ from the median path.
What is the longer-run dot?
It is each participant's estimate of the federal funds rate that would prevail once the economy is at maximum employment with 2% inflation and no shocks. The September 2026 median was 3.2%.
Summary
The dot plot shows where each FOMC participant thinks the federal funds rate should be at the end of each of the next few years and in the longer run, one anonymous dot per person, four times a year. Read the median against the current midpoint to count implied moves, then the spread and the shift since the last release. In September 2026 the median for end-2026 was 4.1%, one step above the newly raised range, and the median path for 2027 had risen half a point since June. The dots are projections of appropriate policy by voters and non-voters alike, not promises: the committee held rates in October with two dissents, and the dots will be redrawn in December.