Author Ann Saphir and Howard Schneider
(Reuters) -Ederic Spare President Jerome Powell on Friday signaled potential changes to FED’s carefully observed interest rates of “DOT Plot” as part of a wide overview of the policy framework that is underway in the US Central Bank and is expected to end by the end of the summer.
“About communications … especially our communication after the meeting, we will carefully look at SEP and also compare ourselves with what other central banks are doing around the world,” Powell said at a research conference in New York, referring to the abstract of the Fed economic screenings.
It is a quarterly report of the Fed about what each of its 19 policy creators expects to grow in economic growth, unemployment rate, inflation and Fed rate in the next few years.
Individual projections of politics speed are shown as points on page 4 of reports, published at the end of the Fed meeting to set up a rate every March, June, September and December. Economists and financial markets use these dots as a guide for what the Fed sees as most likely to do prices.
Dot parcel supporters say that monetary policy can make it more effective, noting that after the global financial crisis, the Fed plot of the point has underdeveloped the expectation of US central bankers to keep rates at zero much longer than the markets could expect.
And, they noted, it can be useful because a roughly-oriented guide, even if they feed on politics and Powell himself often emphasize-not a promise or even an agreed forecast, but a collection of sometimes different views on how the economy and politics will play.
Historically, bad measures for the actual moves of the Fed, largely because economic data appear differently from what the Fed policy creators are expected and, often, economists in general.
For example, at the end of 2021, the cannon pointed out to the end of the end of the end of 2022 less than 1%. In fact, the central bank increased the rates at 4.25%-4.50%, which is the answer to the realization that the inflation building will not withdraw without an aggressive FED hike campaign.
Over the years, creators of Fed policy and economists have given a number of suggestions on how to improve the point, which was published in its current form even before Powell became the Chairman of 2018.
At a research conference on Friday, former Vice President Fed Don Kohn noted that median of 19 projections does not cover uncertainty and various alternative scenarios that may be almost equally convincing. He suggested that the FED shows what economic assumptions are based on the view of the appropriate policy of each individual policy, which would allow analysts to better understand the “function of the” Feda reaction.
