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What drives the FOMC’s dot plots?

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  • Gerlach, Stefan
  • Stuart, Rebecca

Abstract

The Federal Open Market Committee (FOMC) releases quarterly its members’ views about what federal funds rate will be appropriate at the end of the current and the next two or three years, and in the “longer run.” We construct constant horizon interest rate projections one, two and three years ahead and use real-time data on 32 important macroeconomic time series to study how these variables impact on the FOMC’s interest-rate setting. News regarding the labour market is particularly important at all horizons. At longer horizons, financial market, trade and output news also matter.

Suggested Citation

  • Gerlach, Stefan & Stuart, Rebecca, 2020. "What drives the FOMC’s dot plots?," Journal of International Money and Finance, Elsevier, vol. 104(C).
    • Handle: RePEc:eee:jimfin:v:104:y:2020:i:c:s0261560618305308
    DOI: 10.1016/j.jimonfin.2020.102147
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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