What drives the FOMC’s dot plots?

Stefan Gerlach and Rebecca Stuart

Journal of International Money and Finance, 2020, vol. 104, issue C

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.

Keywords: Federal Reserve; Monetary policy; Interest rate expectations; Interpolation (search for similar items in EconPapers)
JEL-codes: E52 E58 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:104:y:2020:i:c:s0261560618305308

DOI: 10.1016/j.jimonfin.2020.102147

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